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What's the Value of a Financial Advisor?

“Price is what you pay. Value is what you get.” – Warren Buffett

Many people wonder if working with a financial advisor is worth the expense. Concerns about cost, trust, and value often make individuals hesitant to seek professional guidance. While it can be difficult to quantify the benefits, both research and real-life experiences show that a trusted advisor can add significant value—both financially and emotionally.

Quantifying the Value of an Advisor

A recent SmartAsset study found that people who work with financial advisors achieve annual returns that are 2.39% to 2.78% higher than those who manage investments on their own. Over time, this advantage can make a substantial difference. For example, a 45-year-old with a $1.5 million net worth could end up with three times that amount by age 77 compared to someone without an advisor.

 

Beyond investment returns, advisors add value through tax planning, diversified portfolios, and strategic financial planning. A capable advisor helps clients grow wealth and protect it through cash flow planning, asset location, and risk management.

The Emotional and Behavioral Benefits of an Advisor

As Ben Graham famously said, “The investor’s chief problem—even his worst enemy—is likely to be himself.” Emotional decision-making can derail financial success. A trusted advisor provides objective guidance, helping clients navigate challenges such as:

  • Overconfidence – Making impulsive investment decisions.
  • Family Dynamics – Managing complex financial relationships.
  • Confirmation Bias – Seeking information that supports preconceived ideas.
  • Loss Aversion – Avoiding necessary financial risks out of fear.

An experienced advisor acts as a steadying force, ensuring clients make rational and informed choices.

Real-Life Examples of How We've Helped Clients

Here are just a few ways we’ve recently helped our clients maximize their financial well-being:

  • Alex (34, self-employed) – Recent business success resulted in his income doubling in a little over a year. We recommended Alex make a S-corp. tax election resulting in tax savings of approximately $7,000 per year. Additionally, this change allowed a shift from a SEP-IRA to a Solo 401(k). Alex was able to contribute $69,000 to his retirement plan in 2024, an increase of nearly $50,000 over what he contributed the year prior to commencing working with Ark Royal Wealth Management.
  • Tom & Karen (54, physicians) – This couple had previously managed their own investments. They interviewed our firm along with two other firms. The advisors at the other firms suggested an “in-service” 401(k) rollover of over $1,000,000 to an IRA that the advisor would manage. We pointed out that this would effectively eliminate Tom & Karen’s ability to do backdoor Roth IRAs each year, something they had not been doing. Moving the assets from the 401(k) to an IRA would have increased the advisors fee while taking a valuable retirement strategy off the table and they said our objective recommendation was a major reason they chose us. 
  • Alice (88, widow) – Since she has no children, her $2 million estate will go to her nephew, Bob. Bob has two adult children, one of which, Steve, has autism. We coordinated revisions to Alice’s estate plan to ensure that  any assets that might pass to Steve go the into an existing supplemental needs trust his parents created for his benefit.   
  • Roy & Janice (78, moving to a CCRC) – The CCRC has a substantial entry fee ($500,000) with approximately 30% qualifying as an itemized for a medical deduction. This increase in deductions will allow us to do a partial Roth IRA conversion while keeping their tax liability constant.   

A Guide Through Financial Complexity

Financial planning isn’t one-size-fits-all. Every client’s situation is unique, with moving parts that require careful navigation. A knowledgeable and ethical financial advisor helps simplify the complex, helping you make the best decisions for your long-term financial security.

If you’re wondering whether an advisor is worth the cost, consider the potential gains—not just in financial terms but also in peace of mind, tax savings, and strategic planning. The right advisor doesn’t just help grow wealth; they help you protect and enjoy it.

Ready to Take Control of Your Financial Future?

Schedule a consultation with us today and discover how professional financial guidance can transform your wealth-building journey.