Vanguard Research Highlights the Broader Benefits of Financial Advice
The financial advice industry has long emphasised portfolio construction and investment management. Yet this focus can obscure the broader, often intangible advantages that professional guidance provides. Beyond numbers, paid financial advice delivers emotional reassurance and meaningful time savings, helping investors manage life’s financial complexities by turning to trusted experts.
A recent research paper from the Vanguard Investment Strategy Group, The Emotional and Time Value of Advice, authored by Paulo Costa, Marsella Martino, and Malena de la Fuente, explores these underappreciated benefits. Their findings show that advised clients gain not only peace of mind but also spend less time managing their finances.
Study Overview
The study surveyed 12,443 Vanguard investors, 62% of whom received financial advice through Vanguard. Respondents were asked about their emotional relationship with money, time spent on finances, and perceptions of financial advice.
“We wanted to move beyond existing data and really understand how investors feel,” said de la Fuente. “Emotion drives perception, and that matters.”
Emotional Benefits: Reduced Stress and Greater Peace of Mind
The results reveal substantial emotional advantages for advised clients. Just 14% of advised investors reported high financial stress, compared with 27% of self-directed investors. Moreover, 86% of those with digital or human advisers reported greater peace of mind—rising to 88% for human-advised clients and 69% for those using digital advice.
Human-advised clients were especially likely to report emotional improvement: 71% felt more confident and secure, and 79% experienced fewer negative emotions such as anxiety or disappointment. Among digitally advised clients, 47% reported more positive emotions, and 57% noted a decrease in negative feelings.
“What stood out was how digital advice still alleviates anxiety,” said Costa. “In fact, 85% of digitally advised clients said they didn’t feel ashamed when using the service.”
Time Savings and Workplace Productivity
Vanguard investors spend an average of 4.3 hours weekly managing their finances. Advised investors spent significantly less time—3.8 hours—compared to 5.5 hours for self-directed investors. About 76% of advised clients reported saving time, with a median of two hours saved per week, or over 100 hours annually. Human-advised clients reported the greatest gains, with 78% citing time savings compared to 62% of digital users.
These savings extend beyond personal benefit. Workers distracted by financial concerns lose about $5,950 to $6,775 annually in productivity. Financial advice helps: half of financially stressed advised clients reported fewer work distractions, saving an estimated $2,200 to $5,850 per year. With digital workplace advice costing only 0.15% annually (around $642 for the average client), the return on investment for employers is considerable.
How Clients Use Their Extra Time
Among advised clients, 49% used their freed-up time for leisure, 35% for family, 29% for exercise, and 27% for household tasks—activities that enhance overall well-being.
Initial Expectations vs. Realised Value
When initially seeking advice, most investors prioritized portfolio outcomes (87%), followed by emotional (74%) and financial value (69%), with time value lagging at 38%. Yet after receiving advice, 86% reported emotional benefits and 76% noted time savings—indicating these benefits are often underappreciated upfront.
Implications for Stakeholders
This research underscores that the value of financial advice extends beyond traditional metrics. For advisers, it's a reminder to educate clients early on about emotional and time-saving benefits. For plan sponsors, it highlights a compelling opportunity: offering advice as part of employee benefit plans can boost both well-being and productivity.
“Understanding the time and emotional benefits of financial advice is key,” said Martino. “It helps advisers tailor their support and allows employers to foster a healthier, more focused workforce.”
Rick Maggi CFP, Financial Advisor Perth, Westmount Financial