Advisor Value is the consideration that a financial advisors work is important, beneficial or useful.
Financial advisors are not all the same and the value proposition of the traditional advisor is evolving. Clients need to understand the value an advisor offers and they deserve more value for what they are paying.
In this 2018 Millionaire Outlook Study, Fidelity seeks to define how do advisors "add value" and where clients get the most value. Modeling Maslow's hierarchy of needs, The "new" Fidelity Advisor Value Stack progressively illustrates value in four basic categories.
Investment Alpha is considered the active return on an investment. It gauges the excess performance of an investment against a no-cost market index or benchmark.
With a similar line of reasoning, Advisor Alpha gauges the value added by the use of a financial advisor. The Putting a value on your value: Quantifying Vanguards Advisor Alpha study seeks to explain and quantify the experience of investors who use an advisor in comparison to those who don't.
- This does not suggest that every advisor— charging any fee—can add value. Like any approximation, the actual amount of value added may vary significantly, depending on clients’ circumstances.
- This paper takes the Advisor’s Alpha framework further by attempting to quantify the benefits that advisors can add by providing these services, either individually or in combination.
