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How to growth your wealth by up to 3% annually with a financial advisor

At HCI, we believe that expert financial advice isn’t just an expense—it’s an investment in your future. Whether you’re looking to grow your savings, buy a new home, protect your family through insurance, prepare for retirement, or achieve financial peace of mind, professional advice can make all the difference.

Why Financial Advice Matters

Studies show that individuals who seek professional financial advice can accumulate significantly more wealth over time.

In one recent whitepaper from 2022, Vanguard identified 7 core value components of financial advice that can boost net returns by up to 3% (Vanguard, 2022). Vanguard calculated that working with a financial adviser can add up to, or even exceed, 3% in net returns. Vanguard note in their study that they “do not believe this potential 3% improvement can be expected annually; rather, it is likely to be very irregular. Further, the extent of the value will vary based on each client’s unique circumstances and the way the assets are managed” (Vanguard, 2022: 4).

The International Longevity Centre (ILC, 2019) found that Brits who received financial advice between 2001 and 2006 enjoyed an average increase in their wealth of c.£47,000 after 10 years compared to those who took no advice.

Please note that every client and situation is different and every HCI plan is bespoke to the individual, their goals, their time horizon, and their circumstances. The value of financial advice would therefore vary by individual and is not guaranteed.

We thought that you might find it helpful to see the 7 ways that financial advisers were found by Vanguard to add value and the impact of each:

1

Helping You Maintain a Long-Term Perspective During Market Ups and Downs

Impact: Up to 2.0%

One of the biggest ways advisers help is by keeping you on track when markets go up or down. It’s natural to feel worried when your investments lose value, but selling in a panic can often make things worse. A good adviser will help you avoid rash decisions and stick to your long-term plan, which could add 2.0% to your returns.

You could benefit from investment advice if...
  • you are not a professional investor
  • it's been 2+ years since a professional reviewed your portfolio
  • you're unsure how to respond if your investments drop 25% or more

2

Helping You Spend Your Money Wisely in Retirement

Impact: Up to 1.2%

If you’re retired, knowing how to take money from your savings in the right order can make a big difference to how long your money lasts. Advisers create withdrawal plans that minimise the tax you pay, adding another 1.2% to your financial wellbeing.

You could benefit from withdrawal strategy guidance if...
  • you are planning a large expense (home, school, etc.) in the next 5 years
  • you are intending to retire within the next 10 years

3

Making Your Investments Tax-Efficient

Impact: Up to 0.6%

Tax can take a big bite out of your returns if you’re not careful. Advisers can advise you on specific approaches such as placing certain investments in tax-friendly accounts or offsetting gains with losses. These strategies can add about 0.6% to your returns.

You could benefit from tax management advice if...
  • you earn over £100,000, paying up to 60% effective tax - you have a lot to gain from maximising tax relief.
  • you're not contributing to a pension.
  • you're unsure how much to pay into your pension monthly.
  • you're maxing your ISA but not using a pension or VCT.
  • you're a business owner or self-employed.

4

Keeping Investment Costs Low

Impact: Up to 0.30%

Fees and costs can eat into your investment returns over time. Selecting low-cost investments means more of your money stays invested and growing. This approach can add around 0.30% to your results.

You could benefit from cost management advice if...
  • you haven't reviewed insurance products in 2+ years
  • you've experienced a major life event (home purchase, child, retirement) without portfolio reallocation
  • you use multiple providers for savings/investing with uncertain costs
  • you're unsure of the fees you're paying on your investments

5

Balancing Your Investments Regularly

Impact: Up to 0.14%

Over time, some investments in your portfolio will grow faster than others, which might push your overall plan off course. An adviser will check your portfolio and advise rebalances to ensure it stays in line with your goals and level of risk. This process could add 0.14%.

You could benefit from ongoing portfolio management if...
  • you haven't reviewed your portfolio composition in 2+ years
  • you recently changed jobs without portfolio adjustment
  • you experienced a life event (home, child, retirement) without portfolio review
  • you lack confidence your allocation aligns with your goals

6

Focusing on Total Growth, Not Just Income

Impact: Variable and specific to each client

Some people focus only on investments that pay regular income, like dividends, especially in retirement. However, advisers often take a "total return" approach, which combines income with the growth of your investments. This approach supports long-term sustainability and complements withdrawal strategies.

You could benefit from income management guidance...
  • your portfolio includes income-producing assets like rental properties or dividend stocks
  • you lack a 3-6 month emergency fund and clear monthly budget

7

Tailoring Your Investments to You

Impact: Variable and specific to each client

Everyone’s financial situation is different. A good adviser will design a plan that matches your goals, how much risk you’re comfortable with, and when you’ll need your money. While this isn’t given a specific percentage in Vanguard’s study, it’s a key part of building a solid financial future.

You could benefit from working with a financial advisor if...
  • you're unsure of your current asset allocation
  • you regularly adding to cash despite a significant emergency fund of cash savings
  • you lack confidence your investments align with your goals

See the Impact in Numbers

We know that visuals speak louder than words. Here’s an illustration of what an extra 3% in annual wealth growth could mean over 25 years*:

What an extra 3% in annual wealth growth could mean over 25 years

With an advisor
£1,356,858
Without an advisor
£666,459
+£690,399
+104%
* This chart illustrates the hypothetical growth of a £250,000 portfolio at a 4% annualised growth rate (called “Without an adviser”) and 7% annualised growth rate (called “With an adviser”) over 25 years. Past performance is no guarantee of future income or returns. This illustration is a hypothetical representation and does not guarantee specific investment or advice outcomes. The actual value added by a financial advisor and the impact of market volatility can vary widely based on a multitude of factors. Content is for information purposes only and should not be taken as financial advice.

Sources:
Vanguard (2022) Putting a value on your value: quantifying Vanguard Advisor’s Alpha. Available at: https://advisors.vanguard.com/insights/article/putting-a-value-on-your-value-quantifying-advisors-alpha (Accessed: 9 December 2024).
International Longevity Centre UK (2019) What it's worth: revisiting the value of financial advice. Available at: https://ilcuk.org.uk/wp-content/uploads/2019/11/ILC-What-its-worth-Revisiting-the-value-of-financial-advice.pdf (Accessed: 9 December 2024).

Ready to Take the Next Step?

If you’d like to see how an HCI financial planner can help you feel more confident about your money, get in touch with us today. Together, we can create a plan that works for you and your goals.

Please use the form on the right to book a call with one of our advisers to discuss your needs.

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