Neil Rogan

Russell Investments has launched a Private Markets Managed Portfolio, bringing a portfolio of private equity, private credit and real assets onto AMP’s North platform with a minimum investment of $25,000 for advised clients.

The portfolio is designed to address longstanding barriers to private markets implementation, including high minimum investments, complex structures, and limited accessibility within advised client portfolios.

“Advisers have wanted to incorporate private markets into portfolios for some time, but implementation has been the challenge,” said Neil Rogan, Head of Distribution, Australia and New Zealand at Russell Investments. “Bringing this onto platform with a lower minimum investment makes it far more practical to use in everyday client portfolios.”

David Hutchison, General Manager of Managed Portfolios and Investments at AMP, said: “We’re seeing strong demand from advisers to incorporate private markets into diversified portfolios, but access and implementation have been key constraints. Expanding our investment menu with the addition of Russell Investments’ Private Markets Managed Portfolio on North helps address those barriers in a way that is practical for advisers and their clients, providing true diversification through a well-governed menu.”

A growing share of global companies are staying private for longer, meaning more value creation is occurring outside listed markets. At the same time, adviser demand for private markets exposure is increasing as portfolio construction evolves beyond traditional asset classes.

The portfolio provides diversified exposure across private equity, private credit and real assets, with underlying strategies selected through Russell Investments’ global research platform.

“Manager selection is critical in private markets, where outcomes can vary widely,” Rogan said.

“Our global scale and research capability allows us to identify high-quality opportunities from leading managers, making them accessible in a format that can be more easily implemented in client portfolios.”

The managed portfolio structure combines private market strategies with more liquid exposures, including ETFs, to help support portfolio management and access to capital over time. It also offers consolidated reporting through the platform.

The portfolio is designed to complement listed equity and fixed income exposures, giving advisers a practical way to introduce private markets as a diversifier within broader client portfolios.

The design reflects Russell Investments’ institutional approach to private markets. Insights from its Private Markets Playbook 2026 highlight the importance of selectivity and manager quality in the current environment, particularly as dispersion in manager outcomes increases.

The portfolio will be available on North from Monday 30 March 2026.

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David Hutchison

AMP’s bi-annual North Managed Portfolios Insights Report finds managed portfolios are becoming the advice vehicle of choice for more practices across Australia, cementing themselves as a mainstay in adviser portfolios.

Launched yesterday, the report looks at the outlook for managed portfolios in Australia and the structural trends and investment themes that underpin them today.

Index managed portfolios were the most popular among advisers on North over the last 12 months, along with partnered managed portfolios which saw over $2 billion in net inflows over the last 12 months.

That contributed to total partnered managed portfolio AUM growing from $12.7 billion to $16.6 billion over the course of 2025, an increase of $3.9 billion, with private markets seen as next ‘growth opportunity’ for sector innovation.

A total of 119 portfolios were added to the platform across 2025, with 25 new series launched, bringing the total to 597 portfolios on North.

Key findings:

• Record growth: North managed portfolios AUM grew for a fifth consecutive year, rising by 31.8% from $19.1 billion to $25.2 billion, as at 30 December 2025.
• Index managed portfolios ‘most popular’ among advisers on North with private markets seen as next ‘growth opportunity’ for sector innovation.
• North’s Buy menu grew by an additional $1 billion to $7 billion, up from $6 billion in 2024 thanks to strong positive flows.
• $25.2 billion in Total AUM: growing from $19 billion as total AUM for North managed portfolios jumped for another consecutive year.
• Over 4200 advisers now on North: With a total addressable market of 12,470, one in three advisers are using North with managed portfolios representing a significant growth opportunity.^[1]

David Hutchison, General Manager of Managed Portfolios and Investments, AMP said: “2025 was another exciting year for managed portfolios on North, with strong growth and excellent new product offerings alongside several new investment managers joining us.
“Over the last 12 months, almost 120 new portfolios were delivered, catering for a breadth of our client and adviser needs. That includes our private markets capability, set up last year, which is really exciting and we look forward to launching a number of PMO portfolios in the first half of 2026.

“We’re pleased to be working with some of the industry’s best investment managers to provide advisers and their clients with true diversification across multiple asset classes and investment options, ensuring their needs are met at every life stage.

“We saw a total of 10 new investment managers welcomed to the platform and 25 new series launched, giving advisers and their clients access to cutting-edge and world-class strategies on North that they can now add to their portfolio mix.”

Edwina Maloney, Group Executive, Platforms, AMP said: “We recognise the twin challenges facing many advice practice owners today: business growth through profitability and maintaining exceptional client outcomes. That’s why managed accounts are so compelling – they allow more advice practices to achieve both while scaling their business responsibly and meeting the changing needs of clients today.
“While the increasing sophistication in the construction and management of managed portfolios has lots of exciting potential, providing access to these innovative developments cannot happen at the expense of good governance.

“Every investment option on North earns its place – and maintains it – through a disciplined governance process. It’s how we protect investors and give advisers confidence. It’s also not a ‘set and forget’ progress – we have and we will continue to test and improve this process to ensure it remains industry best practice.”

Making private markets accessible to retail investors

North is also pleased to announce it has expanded its investment menu with the launch of the Cornerstone Private Markets Managed Portfolio in partnership with Invest Blue Group.

Available to advisers on North, the separately managed accounts suite sits alongside clients’ existing investments and operates as a ‘satellite’ allocation to reduce clients liquidity risk, bringing more choice and flexibility. It offers a simple, advised pathway into private equity, private credit and real assets, providing everyday advised clients exposure to assets traditionally regarded as ‘out of reach’ for most Australians.

The new SMAs reflect a significant cross‑functional effort across technology, business, and operations to uplift North’s capability to support both illiquid and semi‑liquid assets on platform.

Neil Rogan, managing director – Head of Distribution, Australia and New Zealand, Russell Investments said: “The convergence of public and private markets is reshaping portfolio construction. Many of today’s capital-intensive growth opportunities are funded privately long before they ever reach listed markets, yet until recently there were limited practical ways for retail clients to access that part of the opportunity set.

“The recent launch of private markets within a managed portfolio structure on platforms like North reflects how the industry is evolving to close that gap. Managed portfolios provide a governed, diversified way to incorporate private market exposure, which is what makes this innovation meaningful for advisers and their clients.”

Michael Bova, Family Wealth Advisory managing director said: “The ability to harness private markets within a disciplined managed discretionary account is a powerful step forward for the industry and also enhances governance. We’ve increasingly integrated private markets into our wholesale portfolios because they provide access to sources of return that simply aren’t available in listed markets.
“Private equity, private credit, and real assets offer operational alpha and an illiquidity premium that can materially improve long-term real return outcomes for clients who have the time horizon and liquidity profile to accommodate them.”

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Neil Rogan

Russell Investments and financial advice firm Invest Blue has announced the launch of the Cornerstone Private Markets Managed Portfolio, offering everyday advised clients exposure to private assets that remain out of reach for most Australians.

Private companies are staying private longer – and some may never go public at all. This means many investors risk missing out on the growth stories driving industries of the future. The Cornerstone Private Markets Managed Portfolio seeks to solve this gap by offering a simple, advised pathway into private equity, private credit and real assets.

With a minimum initial $25,000 investment the new portfolio uses a separately managed account structure, developed in collaboration with Ironbark, to give qualified advised clients of Invest Blue diversified access to institutional-quality private market opportunities within structures designed for retail investors.

Partner perspectives

“For too long, access to private markets has been limited to large institutions and ultra-wealthy investors. But many of the world’s most innovative and successful companies are choosing to stay private. This managed portfolio allows our clients to participate in those opportunities – through a carefully designed structure for retail investors,” said Chris Ogilvie, Chief Investment Officer at Invest Blue.

“Russell Investments has been investing in private markets for more than 50 years. Our global scale and manager research means we can help open the door for Australian advised clients to participate in institutional-grade opportunities – overcoming many of the traditional barriers faced by retail investors,” said Neil Rogan, Head of Distribution, Australia at Russell Investments.

“Private markets are increasingly being recognised by advisers as an important source of diversification and long-term return potential. At Ironbark, we saw a real opportunity to democratise access to these assets through a retail-compatible managed account structure that features institutional-grade controls around governance, transparency, and liquidity management,” said Alex Donald, CEO, Investment Solutions, Ironbark.

How the portfolio works

The Cornerstone Private Markets Managed Portfolio:

• Invests across 3 to 15 holdings in private equity, private credit and real assets — delivering the type of diversification across private markets assets normally only possible for institutional investors
• Combines evergreen, open-ended strategies with listed exposures, such as exchange-traded funds, to help provide staged access to capital
• Monthly pricing and platform-based reporting
• Will initially be available on the BT Panorama platform to advisers who meet criteria set by Invest Blue.

Global research and manager selection

Russell Investments’ global private markets research platform continuously monitors more than 9,000 private markets strategies worldwide, but only about 100 currently earn a “buy” rating.

“Manager selection is critical in private markets, where performance can vary widely. Our global scale allows us to identify and partner with the very best, giving retail clients institutional-grade access with greater confidence,” Rogan said.

Why this matters

• Companies are staying private longer: the average time before IPO has more than doubled globally in the past two decades
• Retail investors risk being locked out of value creation if they only access companies after they go public
• Private markets are growing rapidly, now representing trillions of dollars globally and playing a central role in innovation, infrastructure and financing.

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Neil Rogan

Australians working with financial advisers say the greatest value they receive isn’t just investment returns – it’s confidence, control, and peace of mind, according to new research from Russell Investments, a global investment solutions partner.

Findings from the new 2025 Value of an Adviser Report, which surveyed 700 Australian investors (advised and unadvised) and nearly 200 financial advisers in Q2 2025, show that the emotional and behavioural benefits of advice are just as important as technical expertise — and may even carry more weight in client satisfaction.

Among advised clients:

• 89% say feeling confident and knowledgeable about their finances is the top financial benefit of advice
• 86% cite feeling more in control of their finances as the top emotional benefit
• 81% say they are extremely confident in achieving their financial goals — compared with only 28% before receiving advice.

“Advisers have always been technical experts, but this research shows their real competitive edge is helping clients feel calm, capable, and in control,” said Neil Rogan, Head of Distribution, Australia and New Zealand.

However, advisers and clients don’t always see value the same way. While 70% of advisers believe their main financial contribution is helping clients avoid costly mistakes during periods of market volatility, only 28% of clients agree.

A new lens: The Value of an Adviser Index

The Value of an Adviser Report – now in its eighth year – found financial advisers added at least 5.6% in value for clients over the past 12 months. In 2025, Russell Investments introduces a new Value of an Adviser Index, which ranks the report’s five traditional components of advice based on how strongly they drive client satisfaction (methodology below). The highest-scoring elements this year were:

• Technical and emotional expertise – Index score: 118
• Appropriate asset allocation – Index score: 113

These ranked ahead of:

• Tax-savvy planning – 92
• Behavioural coaching – 9
• Guidance on financial trade-offs – 88

“The Index shows us that in 2025, technical and emotional expertise, coupled with appropriate asset allocation are the main drivers of client satisfaction. Advisers who focus on these are best placed to deliver the most impactful outcomes,” said Rogan.

Advice delivers measurable financial outcomes

Beyond emotional benefits, the research confirms that advice contributes to real financial security and improved wellbeing:

• Earlier retirement: 42% of advised retirees stopped working before age 65 (vs. 20% of never-advised retirees, 80% of whom retired at 65+)
• A clear path forward: 86% of advised clients have a clear and structured financial plan in place.
• Control and peace of mind: 86% of advised clients say they feel more in control of their finances, and 81% report peace of mind about their financial future.

“Advice is delivering measurable value, both in financial terms and emotional wellbeing. This is a strong foundation for advisers to build loyalty and referrals,” said Rogan.

Trust and fee transparency still matter most

The research also highlighted two essential drivers of client satisfaction:

• Trust emerged as the foundation of a positive client-adviser relationship.
• Fee transparency continues to be a challenge, with clients rating advisers lower than advisers rate themselves on clarity.

Bridging this gap with clearer communication, more client-friendly language, and consistent reinforcement of value can help advisers deepen engagement and satisfaction.

“We want to equip advisers with practical insights they can apply immediately,” said Rogan. “Helping clients feel in control of their financial future is not just a nice-to-have; it’s the core of the value proposition.”

Read the 2025 Russell Investments’ Value of Adviser Report.

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Neil Rogan

Reach Alts, a specialist private markets platform, has formed a strategic partnership with leading global investment firm Russell Investments to broaden adviser access to top-tier private market opportunities in Australia.

The partnership will leverage Russell Investments institutional investment management expertise, global reach and deep research capabilities, enhancing Reach Alts’ existing suite of wholesale funds, which provide access to top-tier global private markets.

The newly launched Reach Global Private Infrastructure Fund provides wholesale investors with seamless access to top-tier unlisted infrastructure investment managers through the Russell Investments Global Unlisted Infrastructure Fund S.C.A., SICAV-RAIF. Underlying investments include high-quality assets across transport, renewables, utilities, and digital infrastructure, offering inflation-linked returns and stable long-term cash flows. It is now available on the Reach Alts platform.

“Our longevity in conducting extensive manager research and due diligence in manager selection and portfolio construction were instrumental in Reach’s decision to partner with us, said Neil Rogan, Head of Distribution for Russell Investments in Australia and New Zealand. “We are well placed to provide further investment and distribution solutions as the partnership progresses. Russell Investments’ open architecture approach aligns perfectly with Reach Alts’ mission to break down barriers and enable advisers to allocate high-quality private markets opportunities for their clients, as well as non-profits such as charities and educational institutions.”

“We are excited to partner with Russell Investments, a global leader in multi-manager investments across both public and private markets,” said Sam Phillips, Chief Executive of Reach Alts. “This partnership strengthens our offering to wholesale investors and advisers, seeking access to institutional-grade private markets, backed by deep research and robust portfolio construction. It’s timely to open access to quality global unlisted infrastructure assets, which play a crucial role in building stable and diversified investment portfolios.”

The Reach Global Private Infrastructure Fund has a minimum investment of $25,000. In line with quarterly asset valuations, the fund will offer quarterly redemptions with a one-year lock-up period. This structure enables investors to benefit from the long-term stability and growth potential of infrastructure assets, as well as understand these assets are less liquid than equities and other listed products.

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Neil Rogan

Russell Investments, a leading global investment firm, has been appointed by Atrium Investment Management to develop customised investment solutions to better serve Atrium’s clients, including leading retail advice network Fitzpatricks.

Sydney-based Atrium has engaged Russell Investments to develop new investment strategies, including designing and actively managing a factor-based Australian equities capability and a customised global listed infrastructure portfolio.  The partnership gives Atrium access to Russell Investments’ much larger universe of investment opportunities and strategies that would otherwise be out of reach.

Russell Investments’ extensive expertise in portfolio construction and manager research will further support Atrium in managing endowment-style portfolios and tailored managed accounts. Russell Investments will also support a range of key services, including asset allocation (strategic and dynamic), manager selection and monitoring, trading, liquidity management, and stress testing.

Atrium was established in 2009 by Fitzpatricks Advice Partners, a leading retail advice network, to provide clients with risk-targeted multi-asset funds and managed portfolios. Atrium has more than $2 billion in funds under management for advisers, high net worth individuals and not-for-profit organisations.

Atrium wanted to re-shape its business for four reasons:

• to improve client outcomes across its range of portfolios
• to lower costs for clients through scale
• to access a larger research capability across all asset classes and underlying managers
• to increase speed between portfolio decision making and execution.

“Russell’s global capabilities and institutional-grade solutions meant it was well-placed to best serve the needs of Atrium’s clients across its endowment-type portfolios and managed accounts,” said Neil Rogan, Russell Investments’ Managing Director, Head of Distribution in Australia and New Zealand.

“Our strong approach to risk management, portfolio implementation and capital market forecasting also set us apart during the due diligence process.”

Tony Edwards, Chief Investment Officer at Atrium, agrees. “This is an exciting time as we embark on a valuable and enduring partnership with Russell Investments,” he said. “Their expertise strengthens our ability to provide high-quality portfolio management and investment opportunities for our investors, and do so at greater speed.”

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Neil Rogan

The potential value delivered by financial advisers to their clients’ investment portfolios has increased year on year to 5.9% in 2023, reaffirming the importance of advice in meeting long-term financial goals.

Released yesterday, Russell Investments’ sixth annual Value of an Adviser Report demonstrates why Australians rely on financial advisers to navigate the practical and emotional aspects of investing, especially in a year where rising inflation and the spectre of a global recession drove investor uncertainty and dominated headlines.

Neil Rogan, Russell Investments’ Managing Director, Head of Distribution in Australia, said: “For the past two years advisers have increased their value to clients, proving yet again why they are the trusted expert in the room that Australians desire when there’s uncertainty in domestic and global investment markets.”​

This year, advisers’ value increased one percentage point, up from 5.8% in 2022. Russell Investments calculates value by examining five components of advice delivery: behavioural coaching (3.4%), appropriate asset allocation (1.2%), tax savvy planning and investing (1.3%), choices and trade-offs (variable) and the value of an adviser’s years of professional expertise (priceless).

“Too often non-advised investors make rash decisions and change investment strategies when there needs to be greater consideration for the longer term. This is where advisers become just as much a behaviour coach as a financial coach. In 2023, behavioural coaching alone could contribute 3.4% to the value of investors’ portfolios,” Mr Rogan said.

​The value added on asset allocation was 1.2%, and the report highlights how clients with an advised strategy could benefit over the longer term. Asset allocation remains responsible for more than 85% of an individual’s investment outcome.

“Retail investors are more likely to recall individual stock performance rather than focusing on broader asset classes and the overall investment strategy. An adviser adds value by bringing a disciplined and sensible approach to meet their clients’ needs,” Mr Rogan said.​

“Non-advised Australians can find themselves in a single strategy super product lumped with other members and not really addressing their long-term financial goals. The potential 1.2% in value from an adviser achieved through carefully considered asset allocation can make a big difference to an investor’s outcome.”

An adviser with tax savvy planning and investing skills contributes another 1.3% in value, and this is crucial to ensure clients’ portfolios don’t unnecessarily leak funds. Given that only 12% of investors list overall tax effectiveness among their top three investment considerations when making investments^[1], there’s an opportunity for advisers to further demonstrate their value.

“Investors need to look beyond their annual tax returns and recognise there are tax implications for many financial decisions now and into the future. Advisers can structure investment portfolios to be tax efficient and work through the complexities that come with tax planning, ultimately optimising their clients’ outcomes,” Mr Rogan said.​

The report shows a client’s wealth journey also extends beyond the quantifiable value provided by their adviser. Retirement planning, life insurance and social security are among many skills that advisers use in their toolbox. Advisers should also recognise the contribution they make to bridging the gap in Australians’ financial literacy.​

“Advisers act in many roles and are often guiding clients through their best and worst times in life. In many circumstances they are a sounding board, a voice of reason and an advocate. Beyond the technical skills it is vital that advisers are equipped to manage and communicate their value in building successful relationships and tailoring financial plans that give clients peace of mind,” Mr Rogan said.

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[1] ASX Australian Investor Study 2023

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Neil Rogan

Leading global investment manager and solutions partner, Russell Investments today extends its range of Sustainable Managed Portfolios, meeting growing adviser demand for sustainable investment solutions.​

The expanded range mirrors Russell Investments’ core range of Multi-Asset Managed Portfolios, adding Conservative, Diversified 50 and High Growth options.

The three new options enable advisers to maintain alignment with clients’ sustainability values, for all levels of risk appetite, while benefiting from the advantages of a managed account structure.

Neil Rogan, Russell Investments Head of Adviser & Intermediary Solutions in Australia said: “Demand for sustainable investment solutions continues to grow among advisers and their clients. By broadening the investment options available through our Sustainable Managed Portfolios, Russell Investments is catering to those investors and advisers who wish to invest according to their values.”​

Constructed as multi-asset managed portfolios, the new options give retail and wholesale investors access to some of the world’s leading investment managers and strategies seeking a positive sustainable outcome.  ​

The Sustainable Managed Portfolios are designed to target lower carbon emissions and enhanced ESG outcomes compared to the relevant benchmark^[1]. The portfolios blend exposures to listed securities, managed funds and exchange traded funds with the aim of meeting both investment and sustainability objectives.

Russell Investments’ Sustainable Managed Portfolios are accessible through multiple investment platforms. In addition to the Sustainable Managed Portfolios, Russell Investments’ core range of Multi-Asset Managed Portfolios will also be available through other platforms later this year.

Yesterdays’s announcement demonstrates Russell Investments’ commitment to offering investors broad responsible investing solutions, including the Russell Investments Australian Responsible Investment ETF (ASX: RARI). Established in 2015, RARI has total net assets of more than $313 million. Russell Investments has been a signatory to the United Nations Principles for Responsible Investment since 2009, and the firm manages more than A$55 billion in ESG assets globally^[2]. In 2023, Russell Investments plans to expand its sustainable investing offering across a broad range of product categories, including ETFs.

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[1] The portfolios have exposure to predominantly managers and strategies that seek to have positive sustainable outcomes compared to the portfolio’s benchmark. Refer to the Product Disclosure Statement (PDS) for more information about the benchmark and ESG considerations for the portfolios. A PDS can be obtained by contacting the relevant platform operator(s).
[2] As at March 2023

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Neil Rogan

The quantifiable value of a financial adviser’s contribution to their client’s portfolio has risen to 5.8% in 2022, as investors face prolonged market volatility.

Released yesterday, Russell Investments’ fifth annual Value of an Adviser Report demonstrates the important role financial advice plays for clients in 2022, as a range of factors – supply chain issues, inflation, rising interest rates and geopolitical conflicts – pressure many investors into sub-optimal investment decisions.

Neil Rogan, Russell Investments Head of Adviser & Intermediary Solutions in Australia, said:“Advisers continue to remain extremely valuable to their clients in 2022. The past two years have been challenging for investors, with many facing these prolonged levels of volatility for the first time in their investing lives. As a result, many investors have turned away from investment markets, seeking shelter in assets like cash which they believe to be safer.

In their role as a behavioural coach, advisers have helped their clients remain invested through the turbulence, preparing them for an uncertain future and working with them to determine their post pandemic goals. This year, that aspect of an adviser’s role alone is responsible for 2.9% of portfolio value.”

The value of an adviser calculation is drawn from five key elements: behavioural coaching (2.9%); appropriate asset allocation (1.6%); tax savvy planning and investing (1.3%); choices and trade-offs (variable); and the value of an adviser’s years of professional expertise (priceless).

In 2022, advisers increased the performance of their clients’ portfolios by 1.6% solely by ensuring an appropriate asset allocation across their investments.

Research^[1] suggests asset allocation is responsible for more than 85% of an individual’s investment outcome. However, this critical step of an advice process is often undervalued and underappreciated.

More than 60% of superannuation savings in Australia’s $1.2 trillion pool of MySuper assets are managed to a single strategy asset allocation^[2]. For a member in a single strategy default, this means adopting the same investment strategy as other members of their fund cohort, despite being of a different age or having a different super balance or retirement goal. As a result, many non-advised Australians suffer sub-optimal investment returns, and may conversely expose their portfolio to unnecessary levels of risk.

“We believe that being in an asset allocation that is appropriate to an individual’s personal needs, as identified by their adviser, can be worth up to 1.6% p.a. in annual portfolio value, particularly in periods of market instability such as those investors are currently experiencing,” Mr. Rogan said.

The remaining 1.3% of quantifiable adviser value is drawn from tax savvy planning and investing. While commonly considered the responsibility of accountants, tax considerations are an important part of the advice process – 23% of investors consider tax effectiveness as one of their top three investment concerns^[3].

“Providing a more tax-effective approach to investing is an area where advisers can distinguish themselves and demonstrate some of the more specific advice strategies that can deliver real value to their clients,” Mr. Rogan said.

“The technical expertise required to minimise a tax position through super is confusing and daunting for clients, but for financial advisers, it’s a consideration they make every day to optimise their clients’ outcomes.”

The Report shows that an adviser’s contribution to the success of their client’s wealth building journey is more than what can be quantified. Just over 55% of Australians are considered financially literate^[4], but 83% of advised Australians report feeling peace of mind about their future^[5].

“The value of an adviser isn’t limited to their positive portfolio impact. Advisers are experts at simultaneously incorporating their emotional expertise into their technical capabilities, to help clients overcome periods of immense personal and family challenges such as trauma, illness, and death,” Mr. Rogan said.

“These tangible, but non-quantifiable, qualities also extend to how advisers help their clients synthesise the myriad combination of personal goals, circumstances, preferences and considerations into a cohesive plan to provide their clients with financial certainty.”

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[1] Russell Investments Making Super Personal White Paper 2020
[2] Australian Prudential Regulation Authority (APRA) 2021
[3] ASX Australian Investor Study 2020
[4] Financial Literacy in Australia: Insights from HILDA Data, March 2020
[5] ASIC What consumers really think 2019

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Neil Rogan

Russell Investments has released the results of its third annual Value of an Adviser Report, aiming to quantify the value that advisers provide throughout a client’s investing journey. The 2020 report estimates that advisers deliver value of 5.2% p.a. or more each year to their clients in a relationship that extends well beyond investment-only advice.

The report outlines five key elements that make up the value of advice including preventing behavioural mistakes; advising on appropriate asset allocation; making investors aware of the cost of holding cash; providing advice on tax-effective strategies; and expert knowledge in additional wealth management services.

Russell Investments Director, Head of Business Solutions, Bronwyn Yates said, “We believe advisers have never been more valuable than during this challenging time. The pandemic has further strengthened the awareness of the value that advisers provide for their clients.”

“We know some clients can experience sticker shock when they see advice fees for the first time. Our report shows that an adviser charging an advice fee of $3,250 to a client with a $250,000 balance can potentially deliver $13,250 of value – that’s $10,000 extra value to the client. Our report aims to helps advisers move beyond a fee conversation and amplify their value creation capabilities.”

Russell Investments developed the following formula to help advisers understand and communicate the full value of their services: A+B+C+E+T = value of an adviser. The formula is explained in the detailed report as follows:

• A is Appropriate asset allocation. Helping clients to work through their values, preferences and motivations from the outset.
• B is for Behavioural mistakes. Helping clients avoid common behavioural tendencies may help achieve better portfolio returns than those investors making decisions without professional guidance.
• C is for Cost of cash. Holding too much cash can come at a cost. Advisers can assist clients in investing in a well-diversified portfolio that seeks to balance the needs of liquidity and targeting growth within the risk levels appropriate to the client.
• E is for Expertise. A common misconception is that financial advisers are purely investment managers, whose only job is to select investments and achieve a certain level of return – quality financial advice goes way beyond this.

• T is for Tax-effective investing. Advisers play an important role in a client’s tax journey, helping them navigate key components when it comes to tax-efficient strategies.

More than just investment management

Of the elements quantified by Russell Investments, an adviser’s ability to help investors avoid behavioural mistakes, such as chasing short-term market volatility or chasing past performance, was the largest contributor, adding at least 2.2% per annum of additional value for their clients’ portfolios.

“Our report shows advisers can play a critical role in helping investors avoid common behavioural tendencies and may potentially help their clients achieve better portfolio returns than those investors making decisions without professional guidance” said Ms Yates.

Russell Investments also observes that during the pandemic, many investors were fearful of loss as markets fell that they switched predominantly to defensive assets, or entirely to cash, just prior to the market hitting its March 17 low, locking in substantial losses.

The report estimates that for someone with an investment balance of $250,000, selling to cash on March 16 would have locked in losses of more than $50,000 versus a member with the same balance who stayed invested during the volatility, recovering almost $20,000 already by the end of May.

Advisers making tax-effective recommendations

Tax effective investing was the next biggest contributor, representing 1.5% of added value. While tax is often considered the realm of the accounting profession, an adviser can also provide expertise on managing and optimising investment tax for their clients.

Advisers can add significant value to a client through structural tax strategies to manage investment tax. This not only requires a close understanding of the client needs, but also knowledge of new innovative investment solutions that can help manage personal tax circumstances – such as managed account solutions.

In 2019, Russell Investments launched a ‘next generation’ suite of multi-asset, managed accounts. Russell Investments Head of Wholesale Partnerships Neil Rogan said managed account solutions allow advisers to tailor an investment solution based on the taxation circumstances of an individual. The efficiency of managed accounts also allows advisers to spend more time engaging with clients.

Mr Rogan said, “While dedicated advisers are confronting challenges as volatility whipsaws many investors’ savings, they also need to articulate that the value they deliver goes far beyond selecting and managing investments. By demonstrating to clients how the value they deliver exceeds the fees charged, advisers can improve client engagement and satisfaction at a time of extreme market uncertainty.”

“We want advisers to know we stand with them during this unprecedented time and we believe advisers have never been more valuable.”

Read the report.

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