The Value of Advice

DJ Carmichael Wealth Management Breakfast - Thursday 22 June 2017

DJ Carmichael Pty Limited recently hosted a Wealth Management Breakfast, to update clients and guests on ‘The Value of Advice’. 

The presentation was broken into three main areas of interest:

  • Current “Macro Investment themes” as seen by the Global research capability of Vanguard 
  • Wealth management strategies. 
  • The importance of financial advice 

Vanguard is a Global Investment Business. The team of analysts at Vanguard that provide updates on macro-economic news regularly provided the data for this presentation. The message was not to get caught up in the media hype. The role of the adviser is to help investors cut through the noise and help investors concentrate on what they need to focus on for their situation.

From a macro-economic perspective, there are good signs in some of the major economies. Two aspects of our economy that need to be watched are:

  1. Softening housing market
  2. Lower growth environment.

The main message was that we need to understand that global economies are still coming through low and negative growth periods. There are signs of improvement, and for the next couple of years expectations of how this lower growth environment flows through to returns on investment is important.

Wealth management strategies concentrated on the investment experience and knowledge of the adviser and the need to look at asset allocation and diversification in portfolios.

Vanguard have worked with investors and analysts to calculate the ‘actual’ benefit as a percentage can be added to investment returns through appropriate advice.

The basis around the importance of advice, is that no investor’s journey is level and steady. There are highs and lows in our life that change the path of our journey, and this is the benefit of receiving advice to ensure good decisions at the right times.

Through their research, Vanguard have indicated that 80% of advice is around the actual advice to be provided while 20% of the time the discussion is around the investment.

In percentage terms, after thousands of investors were interviewed by Vanguard, the potential value added by this equates to an increase of 3% as a return on investment.

All attendees enjoyed the session. DJ Carmichael’s Wealth Management Team looks forward to hosting the next information session for our clients and guests.