Russell Investments has done something rather brave: it has attempted to reduce the value of financial advice to a single number. That number, for 2025, is 4.52%.
The precision is almost comical. Not 4.5%, not "around 4 or 5%", but 4.52% – calculated to two decimal places, as if this were physics rather than the messy business of helping people not wreck their retirements. But even if the decimal places are a bit of theatre, the exercise forces an uncomfortable question into the open: what exactly are financial advisers selling, and is it worth the fee?
Investment Lessons from 1987 and 2021
New Zealanders have long memories when it comes to financial disasters. However, we seem doomed to repeat them in different asset classes.
The 1987 sharemarket crash created a generation-long aversion to equities that arguably cost Kiwi investors more than the crash itself. Those who fled shares and never returned missed decades of recovery and growth. Fast forward to the 2020s, and the only real change was the flavour of asset class in question. Property replaced shares as the "safe" investment – the thing that "always goes up." Except… it didn't.
The residential property market's dramatic decline from its 2021 peak caught out a generation of leveraged investors who'd been assured that bricks and mortar were different. Investors who'd borrowed heavily to accumulate multiple properties found themselves drowning as interest rates climbed and property values plummeted.
Russell's data shows that investors who stayed invested in the New Zealand sharemarket over the past decade outperformed those who missed just the 10 best trading days by 3.57% annually. Miss the 40 best days, and you're 60% worse off.
The expensive lesson: panic is usually more costly than the crisis that triggered it. As is the herd mentality that drives people into overvalued assets for fear of missing out.
What You're Actually Paying for with Professional Advice
The Russell report is admirably blunt about what advisers actually do.
Strip away the corporate language about "behavioural coaching" and the message is clear: advisers are worth paying primarily because they stop you from doing something catastrophic – whether that's panic-selling during downturns or panic-buying during manias.
That 4.52% breaks down like this:
3.57% comes from preventing fear-based or greed-based decisions
0.2% from helping choose appropriate risk levels
0.75% from customising wealth plans.
The rest – the "emotional and technical expertise" of seasoned advisers – is declared "priceless."
What you're paying for isn't genius stock-picking or property market timing. You're paying someone to tell you uncomfortable truths – like that property yields in 2021 didn't justify the prices, that borrowing heavily into an overheated market was dangerous, and that diversification matters even when one asset class seems invincible.
What Russell Misses Entirely
But here's what Russell's tidy arithmetic utterly fails to capture: the value of comprehensive financial planning that extends well beyond investment returns.
1.Tax efficiency
This alone can dwarf that 4.52% in any given year. The difference between holding investments in the wrong structure versus the right one – PIE funds versus direct holdings, trusts versus personal ownership, the timing of realisations – can mean tens of thousands of dollars in a single tax year for even moderately wealthy families.
2. Asset protection
What's the percentage value of having your wealth properly structured so that a lawsuit, business failure, or relationship breakdown doesn't wipe out everything you've built? If disaster occurs, the value is effectively infinite.
3. Succession planning
This is even harder to reduce to basis points. What's it worth to ensure your estate passes efficiently to your children rather than being carved up by lawyers and the IRD? What's it worth to avoid family disputes over inheritances or ensure your business survives your death?
4. Risk management
Risk management extends beyond investment volatility. Adequate insurance coverage, appropriate policy structures, regular reviews as circumstances change – the value becomes apparent only in catastrophe but is no less real.
Support for The Goals That Matter
Perhaps most importantly, Russell's framework completely ignores what might be the highest value proposition: helping clients achieve what they really want from their wealth.
Financial plans aren't spreadsheet exercises. They're roadmaps to specific life goals – retiring early, funding children's education without debt, buying that bach, leaving a meaningful legacy, or achieving financial independence that allows career changes.
Consider these two real examples:
Example 1: Diversifying Portfolios for Property Accumulators
A professional couple in their early fifties came to us convinced they'd need to work until 65. They'd accumulated three rental properties during the boom years – two still carrying significant mortgages. They were stressed and beginning to resent the properties that were supposed to secure their future.
After comprehensive analysis, we restructured their affairs entirely. We helped them sell two properties, eliminated all personal debt, and repositioned their investments into a properly diversified portfolio with appropriate tax efficiency. The result? They retired at 58 with more financial security and significantly less stress. The value wasn't in the 4.52% – it was in getting seven extra years of freedom.
Example 2: Strategic Phased Retirement with Increased Tax Efficiency
A business owner approaching a potential sale came to us six months before signing a term sheet. Through careful structuring involving family trusts, timing of the sale, and strategic use of tax vehicles, we reduced his tax liability by over $300,000 – money that remained with his family rather than going to the IRD. More importantly, we helped him structure the proceeds to support a phased retirement that included funding his children's business ventures and establishing a charitable legacy.
These kinds of results don't show up in Russell's investment-centric quantification. But they're often what clients value most.
The Fiduciary Difference in Financial Advice
This is where the fee-only, fiduciary model becomes essential. When your adviser is paid solely by you – not by product commissions, not by mortgage brokers' referral fees, not by insurance kickbacks – all of these dimensions of advice become trustworthy.
Consider the property boom of the late 2010s and early 2020s. How many advisers benefited indirectly from encouraging clients toward leveraged property investment? A fee-only fiduciary has no such conflicts. Their only incentive is your long-term financial health.
A fiduciary investment adviser operating under frameworks like CEFEX certification isn't only preventing you from panic-selling equities; they're providing the disciplined portfolio construction and advice that can prevent over-concentration of one asset class in the first place.
The leveraged property investors of 2021 needed someone to tell them they were being greedy and foolish. Most didn't have that person. Or worse, they had advisers whose business models depended on encouraging behaviours that would later prove ruinous.
Investors need someone – a real person, with your best interest at heart – in their corner. An algorithm can rebalance a portfolio, but it can't talk someone out of borrowing a million dollars to buy their third rental property when yields don't justify prices. It certainly can't design a comprehensive wealth structure that addresses tax, protection, succession, and life goals simultaneously while adapting to changing circumstances over decades.
What Advice is Really Worth
The real value of fee-only fiduciary advice encompasses dimensions Russell doesn't even attempt to measure.
Behavioural coaching has genuine value. But reducing comprehensive financial advice to a single percentage derived from mainly investment considerations is like judging a surgeon's worth solely by their suturing speed rather than successful procedures.
The real value isn't in any spreadsheet. It's in the confidence of knowing someone is watching your back without any hidden agenda, the relief of having comprehensive planning that addresses tax, protection, and succession alongside investments, and the profound satisfaction of achieving what you set out to do with strategic wealth management.
It’s Time for a Different Conversation
If you're tired of product pitches masquerading as advice, or if you've outgrown the traditional model of financial guidance, perhaps it's time to try a different conversation – and we’re always happy to talk.
As a fee-only, CEFEX-certified fiduciary adviser, Stewart Group is legally and ethically bound to put your interests first – always. We don't receive investment commissions, referral fees, or any form of conflicted remuneration. Our only incentive is your success across all dimensions of your financial life.
Whether you're navigating a business sale, restructuring an investment portfolio that's grown unwieldy, planning for retirement that's closer than you'd like to admit, or simply wondering if there's a better way to structure your wealth – comprehensive fiduciary advice might serve you well.
The first conversation costs nothing but time. Why not contact us today, to arrange a confidential discussion about your financial circumstances and goals.
Nick Stewart
(Ngāi Tahu, Ngāti Huirapa, Ngāti Māmoe, Ngāti Waitaha)
Financial Adviser and CEO at Stewart Group
Stewart Group is a Hawke's Bay and Wellington based CEFEX & BCorp certified financial planning and advisory firm providing personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver scheme solutions.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
Article no. 430
References
Russell Investments (2025). The Value of an Adviser: New Zealand Edition. Russell Investments.
Brokers Ireland (2025). The Value of Advice: A Whitepaper. Brokers Ireland.
Chaplin, D. (2025, October 14). "The value of financial advice (to two decimal points)". BusinessDesk.