The value of advice: Assessing the role of emotions

March 11, 2020

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Recent Vanguard research analyzes the role emotions play in the advisory relationship. We used a survey of both traditionally advised investors and investors who use a robo-advisor service and found that emotional value is a significant component of the perceived value of financial advice.

For investors who assigned the highest value rating to their advisory relationship, around 40% of the incremental value of financial advice was associated with emotional elements such as trust and personal connection with the advisor or advisory service. We believe that future assessments of the value of financial advice should include the emotional benefits.

Vanguard research measures the value of advice by its impact on portfolio, financial, and emotional outcomes. This paper, part of a series exploring the value of advice, focuses on emotional value.

Here's how advisory relationships add value by providing investors with emotional support.

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