134 

 

The Value of Financial Advice: A Narrative Review and 

Conceptual Frameworks 

 

Kirsten L. MacDonald,1 Karen L . Wildman,2 Ellana Loy, 3 and Mark Brimble4 

 

Abstract 

Efforts to increase the low global consumer uptake and recognition of financial advice as a 

trusted profession have been hampered by low financial capability, distrust of financial advisors 

and soaring costs. While considerable research has been published on the value of financial 

advice, a synthesis of scholarship is surprisingly absent, leading to a lack of credible 

information on the outcomes of professional financial advice. To determine the ways in which 

value has been contextualized and measured and the extent to which value has been 

substantiated, this themes-based narrative review comprehensively examines tangible 

outcomes, such as investment performance, and less tangible components of value relating to 

consumer wellbeing and the client-advisor relationship. We conclude by proposing a 

conceptual framework of the value of financial advice to support the development of a more 

consistent, rigorous and coherent body of literature across jurisdictions, with increased 

transparency for consumers and other stakeholders of financial advice.  
Creative Commons License 

 
This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License 

Recommended Citation 

MacDonald, K. L., Wildman, K. L., Loy, E., and Brimble, M. (2025). The value of financial 

advice: A narrative review and conceptual frameworks. Financial Services Review, 33(4), 134-

163.  

Introduction 

With global concern over the cost of living 

driven by post-pandemic inflation and interest 

rate rises, professional, affordable, and 

accessible financial advice may be needed more 

than ever. Improving access to quality financial 

advice supports consumer financial 

sustainability (security, safety, and wellbeing) 

and better navigation of the environment in 

which individuals make personal financial 

decisions. Increasing individual financial 

resilience also creates social and economic 

payoffs for economies by reducing the burden 

on government support in working life and 

retirement (MacDonald et al., 2023; OECD, 

2020). Nonetheless, efforts to increase the low 

 
1 k.macdonald@griffith.edu.au, Griffith University, Brisbane, Queensland, Australia. 
2 Corresponding author (k.wildman@griffith.edu.au), Griffith University, Brisbane, Queensland, Australia. 
3 e.loy@griffith.edu.au, Griffith University, Brisbane, Queensland, Australia. 
4 m.brimble@griffith.edu.au, Griffith University, Brisbane, Queensland, Australia. 

global uptake of financial advice to address 

unmet advice needs are challenged by key 

trends relating to the demand and supply of 

advice.  

The number of individuals seeking advice from 

a financial advisor is declining and the way in 

which individuals seek and consume financial 

advice is changing. Only one in 10 Australians 

sought advice in 2021, down 1% per year since 

2019 (Adviser Ratings, 2022; Australian 

Securities & Investments Commission [ASIC], 

2019). Although one in four Americans 

currently receive advice from a financial 

advisor, like Australia, advised clients are more 

likely to be male and older (CFP Board, 2023). 

From 2019 to 2021, ongoing advice in Australia 

https://creativecommons.org/licenses/by-nc/4.0/


MacDonald et al. 

135 

trended downwards (85% to 75%) and 

piecemeal or one-off advice increased (15% to 

24%) while advice-seeking via technology and 

social media increased (up to 5% of individuals) 

(Adviser Ratings, 2022). Importantly, the 

intention of those not currently advised to seek 

advice in the future is strong (e.g., 41% 

Australia; 25% US), particularly in younger age 

groups (ASIC, 2019; CFP Board, 2023). 

However, a multitude of barriers are cited for 

not proceeding with advice, including cost of 

advice, not getting around to it, size of financial 

position not worth getting advice, wanting to 

control own finances, and anxiety about seeking 

help from and lack of trust in financial advisors 

(ASIC, 2019; Westermann et al., 2020). 

The notion of experts as trusted professionals is 

common across many fields which feature the 

provision of advice and client-professional 

relationships. Although financial advisors’ 

expertise and ability to provide access to 

knowledge and products that clients do not have 

access to is a core reason for seeking financial 

advice, there is a lack of confidence in positive 

long-run outcomes from advice and trust in 

advisors (ASIC, 2019). In addition to a mass 

exodus of financial advisors in some 

jurisdictions due to regulatory changes 

(including increased education requirements), 

service costs have increased significantly (40% 

overall in Australia 2019-2021; 12%-25% 

depending on fee type in US) (Adviser Ratings, 

2019; Tharp, 2021) and are the major barrier to 

advice (Adviser Ratings, 2022; ASIC, 2019). 

However, attempting to reduce costs alone to 

address the affordability and accessibility of 

advice is arguably futile.  

Cost and trust are among the constructs 

intrinsically linked to value. A client will not be 

willing to pay even a lower fee for financial 

advice if the outcomes are not expected to be 

positive. Confidence in positive outcomes is 

associated with the quality of advice and 

relational aspects of financial advice, such as 

trust in the financial advisor, which are built 

over time. Critically, when asked directly about 

value, 18% of Australians surveyed did not see 

value in consulting a financial advisor (ASIC, 

2019). Thus, even addressing quality of advice 

concerns or the pervasive distrust of financial 

advisors stemming from product and advice 

failures and misconduct must be accompanied 

by more credible information on the outcomes 

of personal professional financial advice 

(MacDonald et al., 2023). While considerable 

research has been produced on the value of 

financial advice, a synthesis of scholarship is 

surprisingly absent. 

A scan of the literature reveals two articles that 

fall within the vicinity; these being a systematic 

quantitative literature review by MacDonald et 

al. (2023) which quantified key trends within 

the literature such as authorship, geography and 

research methods, and a review by Westermann 

et al. (2020) of the barriers and benefits of 

financial advice-seeking. While these reviews 

usefully expand scholarship within their 

methodological and research scopes, they lack a 

comprehensive descriptive overview of the 

value of financial advice in its entirety. This 

themes-based narrative review fills this gap by 

describing the history and development of value 

of advice research. We clarify and critique the 

ways in which value has been conceptualized, 

measured, and substantiated in the realm of 

personal professional financial advice. In 

particular, this paper strives to answer these 

research questions:  

1) How has value been operationalized in 

financial advice research (i.e., what is 

‘value’)? 

2) Is value realized for clients (i.e., is the 

advice worth it)?  

3) What recommendations can be made to 

guide and enhance future research on the 

value of financial advice (i.e., where do we 

go from here)? 

Overall, we conclude that the literature 

demonstrates an increasing interdisciplinary 

focus and deepening of existing models and 

empirical testing of elements of value. 

However, there are still limits to the benefits 

that can be gained from this work with 

oftentimes separate threads of research 

emerging. To address these limitations, we 

present a conceptual framework of the value of 

financial advice that pulls the various research 

threads together into one cohesive model. The 

framework seeks to increase clarity and 

understanding about the biopsychosocial and 

economic benefits for consumers and other 

stakeholders of financial advice. In so doing, it 

provides a platform for researchers to explore 

the holistic impact of financial advice on 

consumers and households and demonstrate the 

value this creates over time. Such work would 



  Financial Services Review, 33(4) 

136 

be of interest to practitioners, business owners, 

policy makers and the research community, and 

be impactful in terms of contributing to the 

development of a trustworthy profession to the 

benefit of all. 

The remainder of this paper is organized as 

follows. The next section outlines the review 

methodology followed by the results structured 

by four key themes and culminating in a holistic 

value of advice framework. The last section 

concludes the paper incorporating challenges, 

limitations, and future research directions. 

Methodology 

A narrative review is the chosen method for this 

literature review. In contrast to a systematic 

review which uses precise parameters and 

inclusion and exclusion criteria to 

systematically document key metrics within the 

literature, a narrative review allows for more 

flexibility and nuance (Bourhis, 2017). Peer-

reviewed and selected high-quality grey 

literature (i.e., government articles, PhD theses, 

conference, and industry papers) were sourced 

from multiple disciplines (e.g., financial, 

psychological, sociological) in three databases: 

Web of Science, Scopus, and Google Scholar. 

Title, abstract and keyword searches were 

performed using the following search terms or 

their Boolean counterparts: Value, Financial 

AND Advice OR:  

1. Financial advice terms such as: Help-seeking, 

Plan, Expert;  

2. Personal finance terms such as: Capability, 

Inclusion, Literacy, Behavior; and  

3. Wellbeing terms such as: Difficult, Debt, 

Wellbeing, Anxiety, Peace of Mind.  

A wide range of search terms were purposefully 

used to capture a comprehensive portrayal of 

the value of advice.  

Searches were conducted of articles written in 

English from any era up until February 2023. 

These searches continued for five pages after 

the last relevant article was found, after which 

it was deemed unlikely that further relevant 

articles would appear. Duplicate articles were 

then removed. Members of the research team 

then manually screened the remaining articles 

to include only original empirical research 

pieces investigating the meaning or 

measurement of the value of personal financial 

advice delivered by financial advisors to 

individuals. The selected 332 articles were then 

entered into a database and thematically 

analyzed by the research team using key 

publication metrics, measurement of value 

(RQ1), and outcomes (RQ2) by themes and sub-

themes. A conceptual framework was then 

developed and refined as a result of this themes-

based approach (RQ3). 

Results 

Defining value in the context of personal 

professional financial advice 

Value is a concept that is both familiar yet 

vague; it has different meanings to different 

people but also varies across contexts, 

disciplines, and dimensions. Value has been 

defined as “relative worth, utility, or 

importance”, “something (such as a principle or 

quality) intrinsically valuable or desirable” and 

“a fair return or equivalent in goods, services, or 

money for something exchanged” (Mirriam-

Webster Inc., n.d.). In consumer research, 

Holbrook (2002, p. 5) defines value as an 

“interactive relativistic preference experience” 

emphasizing that value emerges not from the 

product or service itself, but from the 

consumption experience. This experiential and 

dynamic nature of value suggests that its 

components are interdependent, multifaceted, 

and subject to change over time (Holbrook, 

2002).  

Similarly, Boztepe (2007) frames value as a 

derivative of the interaction between the 

consumer and the product or service, mediated 

by individual goals, needs, expectations, and 

emotions. This perspective also highlights the 

temporal dimension of value, distinguishing 

between pre-purchase and post-purchase 

evaluations. In the domain of financial advice, 

this distinction is particularly salient, as the 

perceived value of financial advice may evolve 

with changes in financial circumstances, market 

conditions, or personal priorities. Pagliaro and 

Utkus (2019) offer a tripartite model of the 

value of financial advice, comprising portfolio 

outcomes, financial outcomes, and emotional 

outcomes. While each dimension contributes 

positively to perceived value, the absence of an 

integrated framework limits the ability to 

determine which element is most influential. 

Nonetheless, their work underscores the need 

for comprehensive value measures that account 

for both objective and subjective outcomes. 



MacDonald et al. 

137 

Further complicating the assessment of value in 

financial advice is its classification as a 

credence service, so consumers may lack the 

expertise to evaluate quality even after 

consumption (Srinivas, 2000). The literature 

identifies several barriers to the accurate value 

assessment, including the intangibility of the 

service, the absence of clear quality signals, and 

uncertainty regarding evaluative criteria 

(Alford & Sherrell, 1996; Bloom & Dalpe, 

1993; Srinivas, 2000). These challenges are 

compounded by the individualized nature of 

financial advice which is tailored to the client’s 

specific goals, life stage, and financial position. 

Although definitions of value vary, a common 

thread is the relationship between resource 

expenditure and perceived benefit. In financial 

advice, this relationship is inherently 

personalized: cost and outcomes differ across 

clients, for example, due to different goals, 

levels of wealth, or life stages, and value may 

be derived from tangible results (e.g., 

investment returns) or intangible benefits (e.g., 

peace of mind). Thus, value in financial advice 

is best understood as a dynamic, experiential 

construct shaped by the interaction between 

advisor and client, and contingent upon the 

client’s evolving needs and perceptions. 

The possible outcomes of financial advice for 

clients are therefore wide-ranging and without a 

holistic approach, a complete conception of the 

value of financial advice for clients may not be 

realized. To best conceptualize the value of 

financial advice, it is therefore necessary to 

explore the multidimensional nature of financial 

advice and the environment in which it is 

delivered (e.g., Loy et al., 2021; MacDonald et 

al., 2023; Marsden et al., 2011). 

In the next section, we provide a thematic 

analysis of the literature examining the value of 

professional financial advice to clients. This 

culminates in the presentation of a conceptual 

framework which serves to both summarize the 

multifaceted and interrelated aspects of 

financial advice and support the development of 

a more rigorous, coherent body of future 

research. 

Thematic Analysis 

Articles were coded into themes based on the 

aspect of value under investigation. Those with 

a narrow focus were coded into a single theme 

while others were coded into as many themes as 

considered appropriate to capture the breadth of 

the results. These themes were then grouped 

into four main themes (financial wellbeing, 

other aspects of wellbeing, quality of advice, 

and moderating factors), which are summarized 

in Table 1 and form the structure for our review. 

 

Table 1. Themes and Sub-themes 

Financial wellbeing 

Objective measures 

Debt 

Fees/Costs 

Goal achievement 

Income/welfare benefits 

Insurance 

Investment performance  

Portfolio construction 

Risk 

Trading activity 

Tax efficiency 

Wealth 

 

Other aspects of wellbeing 

Mental wellbeing 

Physical wellbeing 

Social wellbeing 

 

Quality of advice 

Relationship quality 

Satisfaction with advice 

  

 

Moderating factors 

Advisor factors 

Client factors 

Environmental factors 



  Financial Services Review, 33(4) 

138 

Table 1 continues on next page. 

Table 1 continued. 

Subjective measures 

Financial capability (includes financial 

knowledge/literacy*, attitudes and 

behaviors) 

Financial satisfaction 

Financial self-efficacy 

Financial situation* 

 

 

* Incorporates subjective and objective measures.

Financial Wellbeing 

As expected, outcomes pertaining to the client’s 

financial wellbeing were the most frequently 

identified in the literature. While financial 

wellbeing lacks a universally accepted 

definition (Brüggen et al., 2017; Kempson et al., 

2017; Nguyen, 2022), a commonly cited 

definition by the Consumer Financial Protection 

Bureau (CFPB, 2015, p. 18) describes the 

construct as “a state wherein a person can fully 

meet current and ongoing financial obligations, 

can feel secure in their financial future, and is 

able to make choices that allow enjoyment of 

life”. This definition acknowledges the 

subjective elements of financial wellbeing 

(regarding security and quality of life), implies 

that personal characteristics (such as financial 

knowledge and behaviors) are influential in 

making financial choices, and allows for 

measurement of objective outcomes. However, 

elements featuring in other financial wellbeing 

definitions, such as financial satisfaction (Joo, 

2018) and the individual’s environment and life 

stage (Salignac et al., 2020), are missing from 

the CFPB (2015) definition, which adds to the 

ambiguity surrounding the construct.  

While objective measures, such as income, 

wealth, and debt provide tangible evidence of an 

individual’s financial situation, many studies 

rely on subjective measures such as individuals’ 

perceptions which are subject to recall error and 

social desirability bias (Comerton‐Forde et al., 

2022). Further complicating the 

conceptualization of financial wellbeing are 

variations on whether indicators of financial 

behavior, attitudes and knowledge (together 

referred to as financial capability) are included 

as components of financial wellbeing (e.g., 

Kempson et al., 2017) or viewed as external 

influences (e.g., Fu, 2020; Muir et al., 2017). A 

lack of clarity and consistency therefore 

permeates both the definition and 

conceptualization of financial wellbeing, and 

few studies attempt to measure the construct 

holistically. Instead, financial wellbeing 

research has been criticized for relying “on 

measures of convenience, rather than measures 

that are carefully conceived or formally 

developed” (Comerton‐Forde et al., 2022, p. 

134). 

To illustrate, Kim et al. (2003) operationalized 

financial wellbeing using four subjective 

measures adapted from Porter (1990) and Joo 

(1998): “satisfaction with personal financial 

situation”; “perceived financial wellness”; 

“feelings about current financial situation”; and 

“level of stress about personal finance”. 

Financial behaviors were absent in this 

definition, but the five variables representing 

financial behaviors (“developed a plan for my 

financial future”; “started or increased my 

savings”; “reduced some of my personal debts”; 

“followed a budget or spending plan”; and “cut 

down on living expenses”) were instead found 

to be an external influence on financial 

wellbeing (Kim et al., 2003).  

In contrast, based on the work of Ladha et al. 

(2017), Fu (2020) includes both subjective and 

objective measures: “balance income and 

expenses”; “build and maintain reserves”; 

“manage existing debts and has access to 

potential resources”; “plan and prioritize”; and 

“manage and recover from financial shocks”. 

Nonetheless, Ladha et al. (2017) also include a 

financial inclusion measure which Fu (2020) 

argues is a predictor of financial wellbeing 

rather than an outcome. These inconsistencies 

complicate the development of a framework for 

measuring the value of financial advice for 

clients, particularly over time and across 



MacDonald et al. 

139 

jurisdictions, where not only the measures are 

changing, but the macro-economic and 

regulatory environments as well. This stymies 

the development of a coherent and consistent 

body of knowledge and limits the collective 

impact that research can have on practice and 

policy. Thus, in our view, the field of study 

would benefit from a more consistently applied 

financial wellbeing framework. 

Objective Measures 

Historically, research on financial advice has 

concentrated on its objective financial benefits, 

particularly its impact on client portfolio 

construction and investment performance. 

These outcomes are not only tangible but also 

align with the expectations of many clients, 

making them a logical focus for empirical 

analysis. These measures can also elicit more 

reliable results than subjective data which is 

open to bias. However, this narrow emphasis 

overlooks the broader value clients derive from 

the advice process, including behavioral, 

emotional and strategic benefits. Moreover, the 

reliability of findings on financial outcomes is 

complicated by contextual factors. Much of the 

extant literature originates from jurisdictions 

such as the US and Germany where 

commission-based remuneration models, 

shown to induce advisor conflicts of interest and 

impact advice quality, were prevalent during the 

study periods. 

It is perhaps unsurprising then that the literature 

on portfolio construction and investment 

performance of advised portfolios has reported 

more negative than positive results. Evidence 

suggests that advised portfolios are more 

diversified (e.g., Bluethgen, Gintschel, et al., 

2008; Hackethal et al., 2012; Kramer, 2012; 

Marsden et al., 2011) but this increased 

diversification is costly for clients when 

achieved through investments made into higher 

cost mutual funds consistent with advisors’ 

compensation incentives (e.g., Hackethal et al., 

2012; Kramer, 2012; Linnainmaa et al., 2021). 

It is rare to find reports that advised clients 

allocate significantly more of their portfolio to 

cheaper index funds (the study by Chalmers and 

Reuter, 2012 is one example). While 

diversification helps clients avoid home bias 

(e.g., Bluethgen, Gintschel, et al., 2008), several 

studies (e.g., Gerhardt & Hackethal, 2009; 

Kramer, 2012; Marsden et al., 2011) suggest 

this is due to naïve (or simple) forms of 

diversification, namely, through higher mutual 

fund allocation.  

Additionally, there is little evidence that more 

diversified client portfolios improve investment 

performance. Few studies (e.g., Grable & 

Chatterjee, 2014) find significantly better 

returns in advised individuals while more report 

minimal changes to risk-adjusted returns (e.g., 

Gerhardt & Hackethal, 2009; Kramer, 2012; 

Marsden et al., 2011). Marsden et al. (2011) 

argue that the lack of strong evidence for 

advised clients outperforming the non-advised 

is a function of research typically being 

conducted during periods of market growth, 

where value rises across many markets and 

industries, and maintaining discipline is 

relatively easy. Advised clients are found to 

trade more which again is consistent with 

commission-based renumeration models in 

some jurisdictions (Hackethal et al., 2012), 

however, Linnainmaa et al. (2021) find this is 

how advisors manage their own portfolios. 

Marsden et al. (2011) also emphasizes that 

advised investors were more likely than non-

advised to increase risk and portfolio size 

during a market downturn, which is consistent 

with advisor observations of some clients taking 

advantage of asset price reductions during the 

COVID-19 pandemic (Loy et al., 2021). 

Reforms to transition the advice industry to a 

profession, including the removal of 

commissions, increased education 

requirements, and a focus on putting clients’ 

interests first, may partly explain this shift to 

more positive results. Further research is needed 

to confirm this trend.  

Subjective Measures  

While an individual’s objective financial 

situation is arguably a vital element to capture 

in the measurement of financial wellbeing, 

some researchers maintain that a client’s 

subjective view of their finances is even more 

important (e.g., Marsden et al., 2011; Prawitz et 

al., 2006). Subjective outcomes from financial 

advice have received less attention in the 

literature but are gaining traction with most 

articles having been published in the last 

decade. Measurement largely involves surveys 

conducted in the US, UK, and Australia 

examining client views after receiving advice, 

rather than the views of advised versus 

unadvised clients, as is typically the case with 

objective measures. Working with an advisor is 



  Financial Services Review, 33(4) 

140 

associated with many positive perceptions, 

including perceived improvement in financial 

circumstances (Theodos et al., 2015), improved 

financial confidence (CoreData Research, 

2020), preparedness for retirement (Kim et al., 

2003), a greater sense of control of and less time 

worrying about one’s financial situation (Irving 

et al., 2011; Pleasence et al., 2007), and 

improved self-efficacy concerning financial 

decision-making (Kim et al., 2003; Marsden et 

al., 2011). These positive perceptions following 

advice are consistent across sociodemographic 

groups including low-income earners 

(Brackertz, 2014), university staff (Grable & 

Joo, 2003), college students (Britt et al., 2015), 

and widows (Rehl et al., 2016).  

Financial advice is positively associated with 

improving clients’ financial engagement and 

behavioral biases. Advised clients spend more 

time searching for financial information (Lee & 

Cho, 2005), learning about financial topics 

(Marsden et al., 2011), and striving to improve 

financial planning behaviors (Ford et al., 2020). 

Advisors reduce home bias (see Objective 

Measures section), trend chasing (D’Acunto et 

al., 2019), and the disposition effect of managed 

portfolios (Hoechle et al., 2018). Marsden et al. 

(2011) suggest that a key role of financial 

advisors is to help clients ‘stay the course’ 

during volatile or declining markets. Consistent 

with this argument, Grable and Chatterjee 

(2014) found that clients who sought advice 

from a financial advisor prior to the Global 

Financial Crisis (GFC) experienced less wealth 

volatility during the GFC than non-advised 

investors. Similarly, Winchester et al. (2011) 

found that advised investors were more than 

one-and-a-half times more likely to maintain a 

long-term investment strategy than non-advised 

investors during a market downturn.  

Financially advised individuals also exhibit 

several important financial behaviors pertaining 

to savings, planning and budgeting, credit, and 

buying behaviors. Advised clients are more 

likely to save (Gerhardt & Hackethal, 2009), 

budget (Bagwell, 2000; Brackertz, 2014; 

Theodos et al., 2015) and plan for retirement 

(Kim & Garman, 2003; Marsden et al., 2011; 

Tang & Lachance, 2012). Advice recipients are 

also more likely to reduce their use of credit 

cards (Elliehausen et al., 2007; Woodhead et al., 

2017), pay their bills on time (CFPB, 2016), 

compare their options before taking out loan 

products (Fan & Chatterjee, 2017) and prioritize 

long-term goals over current consumption 

(Bagwell, 2000; Brackertz, 2014; Martin Jr et 

al., 2016). The literature examining the 

relationship between financial advice and 

subjective attitudes and behaviors is therefore 

largely positive and clear in terms of the 

benefits it provides. 

The emerging literature examining the 

relationship between financial advice and 

financial literacy is less distinct. While a 

comprehensive review is outside the scope of 

this paper, our review finds most studies report 

no or limited improvements in objective 

financial literacy from financial advice (e.g., 

Britt et al., 2015; Tang & Lachance, 2012; 

Theodos et al, 2015). These null findings are 

purportedly the result of several factors, 

including poor attendance at coaching sessions 

(Theodos et al., 2015); lack of participant 

motivation, engagement, willpower, or patience 

(Hung & Yoong, 2013; Theodos et al., 2015); 

and the temporal nature of the advice (with brief 

ad-hoc education interventions having higher 

rates of financial literacy decay) (Migliavacca, 

2020). We also contend that studies using ‘have 

obtained financial advice’ (e.g., Tang & 

Lachance, 2012) are poor proxies for financial 

advice due to lack of information and context on 

what the advice entailed and may therefore also 

contribute to the null findings.  

Although null or limited associations have been 

reported between financial advice and objective 

financial literacy, positive effects have been 

consistently reported on subjective financial 

literacy, attitudes and behaviors (e.g., 

Brackertz, 2014; Britt et al., 2015; Kim & 

Garman, 2003; Theodos et al., 2015). These 

mixed results have lead Theodos et al. (2015, p. 

151) to conclude that advice effects “may derive 

directly from behavioral change or skill 

formation, rather than through increases in more 

abstract knowledge.” Individual factors have 

also been influential and add context, with trust, 

willingness to learn, and the length of the client-

advisor relationship having significant positive 

effects on financial literacy (Hung & Yoong, 

2013; Linh et al., 2016; Migliavacca, 2020). 

However, more recent research provides 

evidence for the argument that individual 

factors alone are insufficient to improve 

financial capability (financial literacy, attitudes, 

and behavior) and wellbeing. Fu (2020) used an 

institutionalist approach, emphasizing that 

individuals need both the ability (financial 



MacDonald et al. 

141 

knowledge, attitude, behavior, motivation) and 

the opportunity (through access to financial 

products and institutions) to act, thus 

advocating for a wider context to more 

definitively measure financial capability and 

predict the factors that enhance or inhibit 

financial wellbeing. From the research 

presented, we conclude that financial advice can 

enhance individuals’ financial knowledge, 

attitudes, and behaviors, but that unmeasured 

psychosocial and environmental factors can 

affect whether and to what extent financial 

literacy translates into lasting behavioral change 

and financial wellbeing. This highlights the 

need for longitudinal research across 

jurisdictions that is premised on a conceptual 

framework of the value of advice to rigorously 

examine its impact. 

Other Aspects of Wellbeing 

The second theme identified in this review 

pertains to other aspects of wellbeing beyond 

financial wellbeing, including mental, physical, 

and social wellbeing. The World Health 

Organization (WHO) (2023, para. 3) defines 

mental wellbeing as “a state in which an 

individual acknowledges their own abilities, 

can cope with everyday life stresses, work 

productively, and contribute to their 

community”. Physical wellbeing encompasses 

not only the absence of chronic disease, but 

feeling healthy and energetic, combined with 

healthy sleep and regular physical activity 

(Zemtsov & Osipova, 2016). Social wellbeing 

is described as a degree of involvement in social 

networks, together with social support that is 

both received and perceived to be available 

when called upon (Holt-Lunstad et al., 2010). 

All three aspects of wellbeing are considered 

integral to overall health (WHO, 2023) and are 

covered in varying degrees in the financial 

advice literature, with mental wellbeing having 

been examined the most. 

Insights into the mental, physical, and social 

wellbeing outcomes of financial advice have 

largely come from studies on debt and welfare 

advice. Research into non-financial wellbeing 

outcomes dates back to 2000, including a 

doctoral thesis examining work and personal 

outcomes of credit counselling (Bagwell, 2000) 

and a peer-reviewed paper on health 

improvements linked to welfare benefit advice 

(Abbott & Hobby, 2000). Most of this literature 

has emerged in the last decade, with a relatively 

high proportion published since 2018. It 

predominantly appears in industry and 

government publications rather than peer-

reviewed journals. For example, a wave of 

research into the effect of government-funded 

debt advice programs emerged from the UK in 

the 2000-2010 decade. Value was 

operationalized through qualitative and 

quantitative interviews, with reports 

highlighting mental wellbeing benefits (reduced 

stress and anxiety) together with financial 

wellbeing benefits (feeling more relieved, 

confident and in control of their finances) 

following advice (Day et al., 2008; Pleasence et 

al., 2007; Turley & White, 2007). The literature 

in this domain is primarily descriptive in its 

analysis, and overwhelmingly positive in 

reporting improvements in mental wellbeing.  

One paper detailed a study involving a 

randomized controlled trial (RCT) which 

experimentally examined the benefit of a 

national debtline using comparisons with a 

control group where no such advice was 

offered. This study was reportedly the first time 

such a methodology had been used in the debt 

advice area (Pleasence et al., 2007). This 

experiment was designed to explore the 

effectiveness of debt advice on a range of life 

circumstances. While the RCT demonstrated 

statistical improvements in financial 

circumstances following advice, improvements 

in general health, parenting, and family 

relationships could not be established through 

the RCT even though these findings were 

reported qualitatively in an accompanying 

study. The researchers blamed a lack of 

statistical power (due to participant attrition and 

the small sample size) for these null findings. 

Apart from this study, few industry or 

government publications have attempted to 

quantify the value of advice using more 

rigorous research designs. 

Peer-reviewed studies also largely focus on 

wellbeing-related outcomes of debt and welfare 

advice and also primarily report positive results. 

Encouragingly, some well-designed peer-

reviewed studies exist which provide stronger 

empirical support for the more descriptive 

findings outlined in the industry reports. For 

instance, a UK study examined the effect of 

welfare advice using patients attending a 

medical facility and a quasi-experimental 

controlled design with follow-up data collected 

at three months (Woodhead et al., 2017). The 



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142 

regression analyses controlled for age, gender, 

and ethnicity. Compared to the control group, 

women and Black recipients reported mental 

health improvements, and wellbeing scores 

increased for those who received positive 

welfare outcomes. Similarly, Abbott et al. 

(2006) performed analyses on groups of 

individuals with different financial outcomes of 

welfare advice, finding that those with an 

income increase had significant improvements 

in mental health and emotional role functioning 

at 12-month follow-up, compared to those 

without an income increase. These results 

provide further evidence of the association 

between financial gains and increased mental 

health and wellbeing. 

While much of the literature focuses on mental 

wellbeing outcomes, a smaller subset examines 

physical and social wellbeing and the impact of 

financial advice on work performance. The 

results regarding physical wellbeing are 

generally, but not always, affirmative. For 

instance, an intervention study assessed health 

outcomes following active and non-active credit 

counselling clients and found active members 

of the program improved in physical health 

markers over 18 months (Kim et al., 2003). A 

similar study reported improved health for debt 

management clients over a two-year period 

(O'Neill et al., 2006). However, Abbott et al. 

(2006) only found bodily pain symptoms had 

improved in the six months following welfare 

advice, with no significant improvement in 

three other physical health markers (general 

health, vitality, and physical role functioning). 

The authors suggested that a longer follow-up 

period might be necessary to engender 

statistically significant results in physical 

health, “given the cumulative effect of 

deprivation on health across the life course” (p. 

6).  

Encouragingly, studies also tend to examine and 

find positive links between professional 

financial advice and multiple non-financial 

wellbeing outcomes. Studies cover a breadth of 

analytical strategies from basic frequency data 

(e.g., CoreData Research, 2020; Irving et al., 

2011) to more advanced probit models (Europe 

Economics, 2018). The research conducted by 

Europe Economics (2018) is an example of a 

considered, large-scale, mixed-methods design 

which detailed significant effects in mental 

wellbeing (depression and panic attacks) and 

physical wellbeing (arthritis, back pain, and 

chronic obstructive pulmonary disorder), as 

well as qualitative evidence on employment-

related outcomes (increased productivity). 

Furthermore, the researchers also sought to 

quantify the economic impact of financial 

advice using a combination of estimates 

pertaining to healthcare systems and 

productivity costs. The estimated benefit of 

clients receiving debt advice equated to an 

aggregated social gain in mental health and 

work-related outcomes of £154-307 million per 

annum (Europe Economics, 2018).  

The focus on debt and welfare advice persists in 

more recent literature (Pollard et al., 2020; 

Zeamer, 2020). However, some new studies 

take a different approach to similar issues, by 

incorporating psychological constructs and 

theories into the investigation of financial 

advice and the various non-financial wellbeing 

outcomes. For example, Ford et al. (2020) 

employed a qualitative observational design to 

explore the role of financial couples therapy on 

relationships and help-seeking behavior, with 

reports that therapy produced reduced anxieties, 

better communication and deeper relationships 

between the couples, and a stronger desire to 

improve financial behaviors. Jackson et al. 

(2022) followed a cohort of men at risk of 

suicide due to financial distress who 

participated in a psychosocial intervention. At 

six-month follow-up, participants recorded a 

49% reduction in depression scores, a 55% 

reduction in suicidal ideation, and a 26% 

increase in financial self-efficacy scores (a 

financial wellbeing measure). These findings 

reflect a broader shift towards understanding 

financial advice not only as a driver of 

economic outcomes, but also as a catalyst for 

psychological, physical, and relational 

wellbeing. 

Quality of Advice 

The third theme, quality of advice, has been 

examined least often in the professional 

financial advice space. It contains three sub-

themes: relationship quality; satisfaction with 

advice; and trust. In government literature, 

quality of advice has been described as a three-

way interaction, encapsulating “the provision of 

high quality, accessible and affordable financial 

advice for retail clients” (Australian 

Government, 2022, p. 1). In the academic 

literature, the (obvious) assertion has been made 

that quality financial advice “should aim to 



MacDonald et al. 

143 

enhance investor utility” (Bluethgen, Meyer, et 

al., 2008, p. 3), however, the credence good that 

is expert financial advice means the typical 

client lacks the necessary knowledge or 

information to accurately assess the quality of 

the advice provided, even ex-post (Bluethgen, 

Meyer, et al., 2008; Srinivas, 2000). Thus, it is 

ironic that research into the quality of financial 

advice has often focused on basic subjective 

measures and reporting of individuals’ 

perceptions about the service they receive in the 

short term or at a single point in time, more so 

than comprehensive or holistic measures and 

analyses over the medium to long term. These 

more subjective accounts are primarily found in 

industry and government publications, often 

highlighting high satisfaction and trust in 

advisors, along with a low likelihood of 

switching advisor (e.g., Farr et al., 2018; 

Madamba & Utkus, 2017). Grable and Joo 

(2003) also report high satisfaction of advised 

clients with their advisor through 

recommendations to family and friends. The 

non-advised are used in some studies for 

comparative purposes, with these individuals 

typically expressing concerns over quality, 

trust, and affordability, and a perception of 

being capable of making their own financial 

decisions (ASIC, 2019; Himawan, 2020). This 

has led some researchers to advocate for low-

cost automated online advice options (Farr et 

al., 2018), in line with the rise of robo-advice. 

Other research directions further investigate 

psychosocial constructs from the financial 

wellbeing literature. While trust is an important 

element of the client-advisor relationship, 

Manders (2021) finds that an examination of 

personality traits can be used to identify self-

protection measures to counteract the 

information asymmetry in the client-advisor 

relationship and thus empower advised clients 

to improve their evaluation of the quality of 

advice. Additional data and modelling are 

required to empirically test the impact on advice 

outcomes, including financial wellbeing. 

Government publications are comparatively 

abundant, particularly in Australia, reflecting 

the country’s history of financial advice 

scandals and subsequent regulatory reforms 

(e.g., ASIC, 2019; Australian Government, 

2022). More recently, however, there has been 

a noticeable rise in publications that adopt a 

more holistic approach to evaluating advice 

quality or appear in peer-reviewed journals, or 

both. For instance, an Australian study 

examined the components of advisor-client 

relationship quality and the extent to which 

these changed over time. All components of 

relationship quality were measured with scales 

previously determined to be reliable and valid. 

The key determinants of relationship quality 

were reported to be trust, engagement, and 

commitment, with many client perceptions of 

relationship quality increasing over time, 

despite the instability and regulatory changes 

within the sector (Hunt et al., 2022). Another 

study from Italy used a structural equation 

model to test the impact of length of relationship 

and ability to understand clients’ emotional 

associations with money on four relationship 

outcomes: satisfaction, trust, loyalty, and 

referral propensity. The better the advisor was 

at understanding their client’s emotional 

associations with money, the better the 

relationship and length of relationship also 

positively impacted relationship outcomes 

(Lozza et al., 2022). These studies signal a 

growing academic interest in advice quality as a 

multidimensional construct central to 

understanding the value of financial advice, 

paving the way for more comprehensive 

conceptualizations of value. 

For instance, Madamba and Utkus (2017) 

employed a mixed-methods approach using a 

sample of advised clients to identify and 

quantify the components of trust in financial 

advisors. They identified three core dimensions 

of trust, functional, emotional, and ethical, with 

emotional trust having the greatest influence 

(53%), followed by ethical (30%), and 

functional trust (17%). Acting in a client’s best 

interest and advocating for the client were key 

drivers of an advisor’s trustworthiness. In 

contrast, Bluethgen, Meyer, et al. (2008) 

assessed advice quality through advisors’ return 

predictions of common asset categories (a 

measure of overconfidence) and portfolio 

recommendations to fictitious clients. Their 

findings showed that advice quality improved 

when advisors were more sophisticated 

(rational) and less reliant on commission-based 

remuneration, while advisor experience and 

education had no significant effect.  

While also not significant in the survey and 

interview responses of advisors reported in Loy 

et al. (2023), Likert-scale results indicated that 

increases in education levels and continuing 

education requirements were perceived by 



  Financial Services Review, 33(4) 

144 

advisors as having a moderately positive impact 

on their ability to deliver value to clients. 

Participants believed these benefits would 

become more pronounced over time, as the 

profession adjusts to regulatory changes. This 

suggests a divergence between empirical 

measures of advice quality and advisors’ 

perceptions, highlighting the need for further 

research into how professional standards 

translate into client outcomes. Importantly, Loy 

et al. (2023) also examined education and 

experience as moderating factors in advisor 

behavior within the client-professional 

relationship, providing a foundation for 

exploring how individual advisor 

characteristics influence the delivery and 

perception of advice quality and shape client 

outcomes. 

Moderating Factors 

As outlined in the Results section, determining 

the value of advice is complicated by the 

heterogeneity of investor circumstances. 

Similarly, advisor factors, such as an advisor’s 

education, experience, or conflicts of interest, 

and environmental factors, including the 

business model (e.g., advice delivery via face-

to-face, robo-advice, video conferencing, 

telephone etc.), financial markets and the 

regulatory or cultural environment, interact 

with client factors and the client-advisor 

relationship, influencing value through the 

quality of advice and client outcomes. For 

example, the impact of new products in 

financial markets and the state of the markets, 

the impact of regulation on administrative 

burden, time and cost of advice leading to 

stakeholders’ concerns about the accessibility 

of advice and value for money, and government, 

regulator and professional body interactions 

over professional and education standards, are 

all designed to increase capability to deliver 

quality advice to add value for clients and 

protect them from harm (e.g., ASIC, 2019; Loy 

et al., 2021, 2023). Consideration of these 

moderating factors, along with how value is 

conceptualized, is therefore vital for a holistic 

understanding of the value of financial advice 

(MacDonald et al., 2023). 

An important dimension of advisor factors is the 

set of actions advisors undertake throughout the 

financial planning process. Conceptualizing 

value as an evaluation of actions rather than of 

products or “things” (Graeber, 2001) is 

particularly relevant in financial advice, where 

advisors engage in diagnosing client needs, 

setting goals, formulating strategies, 

implementing plans and monitoring and 

adjusting those plans over time. These actions 

represent the core of professional service 

delivery and are distinct from the outcomes 

clients may experience.  

It is critical to differentiate between advisor 

actions and client outcomes, as the latter are 

often shaped by factors beyond the advisor’s 

control. For example, wealth accumulation and 

investment returns depend heavily on the 

client’s investment horizon, risk tolerance, and 

external constraints. As such, financial 

outcomes alone may not consistently reflect the 

value of advice (Marsden et al., 2011). Instead, 

value may more reliably be found in the 

advisor’s behavioral coaching and expert 

guidance, which helps clients stay disciplined 

and emotionally grounded, particularly during 

market volatility (Loy et al., 2023; Pagliaro & 

Utkus, 2019). Despite this, Loy et al. (2023) 

found that advisors rated behavioral coaching as 

the least beneficial financial service they 

provided, even though open-ended responses 

revealed its importance in boosting client 

confidence and contributing to both financial 

and mental wellbeing. 

Client outcomes are also shaped by client 

characteristics, including psychological and 

emotional factors. Advisors increasingly 

recognize their dual role as both technical 

experts and informal counsellors, even though 

they may lack formal training in the latter 

(Anthes & Lee, 2002; Loy et al., 2021). 

Financial psychology research suggests that 

advisors who can adapt their style to 

accommodate clients’ emotional needs are more 

likely to build trust and foster meaningful 

relationships (Anthes and Lee, 2002). This 

highlights the social-emotional context of 

advice, where value is co-created through 

relational elements such as emotional, social, 

and informational support, not just financial 

expertise. 

These insights highlight the intricate interplay 

between advisor actions, client characteristics, 

and relational dynamics in shaping perceived 

value. This complexity underscores the need to 

examine moderating factors such as advisor 

education, experience, and adaptability, that 

influence how advice is delivered and received 



MacDonald et al. 

145 

across diverse client contexts. Thus, the value 

of financial advice is multifaceted, context-

dependent, and open to various 

conceptualizations. Tables 2 and 3 serve as 

exemplars summarizing the findings from the 

Results section, addressing respectively: (i) 

what constitutes value, i.e., how it is 

operationalized and measured (RQ1); and (ii) 

whether value is realized (RQ2). While this 

narrative review identifies individual factors 

that moderate the value of advice, quantifying 

their interaction or cumulative impact on 

consumer value remains challenging. In 

response to this gap, the Thematic Analysis 

section introduces a conceptual framework to 

address RQ3. This framework synthesizes 

existing literature to broaden and deepen 

understanding of the value of financial advice 

and aims to stimulate interdisciplinary inquiry 

and empirical validation through longitudinal, 

multijurisdictional research. 

 



  Financial Services Review, 33(4) 

146 

Table 2. Measures of Value: Some Examples 

Theme Sub-theme Author (Year) Measures 

Financial wellbeing   

 Objective 

 measures 

Debt Elliehausen et al. (2007) Credit score: Summary measure of credit worthiness as provided by the Empirica risk 

score, involving six measures of credit use (change in revolving debt; change in the 

number of credit cards with positive balances; change in credit card utilization as a 

percentage of credit limit; change in consumer debt; change in total debt; change in total 

number of accounts with positive balances). 

Goal achievement Pagliaro and Utkus 

(2019) 

Probabilistic forecast: Estimate of the probability of achieving a financial goal or wealth 

target (secure retirement) at the end of a specified period. 

Income/welfare 

benefits 

Various Measures are generally reported vaguely or not at all. 

Insurance Blanchett (2019) Survey: One item assessing whether a household had life insurance at least equal to the 

total wage income of the household (yes/no). 

Investment 

performance 

Bluethgen, Gintschel, et 

al. (2008) 

Statistic: Tracking error with a benchmark portfolio. 

Hackethal et al. (2012) Statistics: Sharp ratio; monthly log portfolio returns; net of direct costs, as calculated by 

the method of Dietz (1968); Jensen’s alpha; Alpha four factor model. 

Marsden, Zick and 

Mayer (2011) 

Statistics: Annual rate of account growth over the past 1, 2 and 3 years. 

Portfolio 

construction 

Bluethgen, Gintschel, et 

al. (2008) 

Statistics: Equity share of portfolio; share of equity held as mutual funds; ratio of 

international equity to total equity assets. 

Hackethal et al. (2012) Statistic: Average share of directly held equity. 

Risk Bluethgen, Gintschel, et 

al. (2008) 

Statistic: Standard deviation of portfolio returns, derived from the variation of monthly 

gross portfolio returns as calculated by Dietz (1968). 

Hackethal et al. (2012) Statistic: Variance of monthly portfolio returns. 

Marsden, Zick and 

Mayer (2011) 

Survey: Increased the investment risk involving existing and new money in retirement 

account(s) (yes/no). 

Table 2 continued on next page. 

 



MacDonald et al. 

147 

Table 2 continued. 
Theme Sub-theme Author (Year) Measures 

 Trading activity Bluethgen, Gintschel, 

et al. (2008) 

Statistics: Transaction costs; annual sales; purchase turnover. 

Hackethal et al. (2012) Statistics: Number of purchases per month scaled by account volume; monthly account 

turnover.  

Wealth Grable and Chatterjee 

(2014)  

Statistics: Average change in wealth; standard deviation of wealth changes; risk adjusted 

wealth volatility (using a modified Modigliani measure (M2)). 

Marsden, Zick and 

Mayer (2011) 

Survey: Self-reported retirement savings; emergency fund adequacy; total defined contribution 

account values; total supplemental account values.  

 Subjective 

 measures 

Financial 

situation 

Littlechild (2013) Survey: How confident are you that you will reach your primary financial goal? How much 

clarity do you have around your financial goals? 

Marsden, Zick and 

Mayer (2011) 

Survey: Retirement confidence: confidence in having enough money to live comfortably 

throughout retirement years. 

Theodos et al., 2015 Survey: Level of financial stress (two items: 1-7 scale. Item 1: rating own level of financial 

stress. Item 2: how often individuals wanted to go out but could not afford to). Satisfaction 

with present financial situation (1-7 scale). Confidence in ability to achieve financial goals (0-

100% scale). Confidence in ability to make ends meet in an emergency (0-100% scale). 

Progress toward improving household’s financial security/ ability to take care of family/ live 

more comfortably (0-100% scale). 

Qualitative: specific interview questions not provided. 

 Financial 

attitudes 

Marsden, Zick and 

Mayer (2011) 

Survey: Could offer an estimate of asset allocation (yes/no); increased the amount of time 

spent learning about financial topics (yes/no). 

Table 2 continued on next page. 

  



  Financial Services Review, 33(4) 

148 

Table 2 continued.  
Theme Sub-theme Author (Year) Measures 

 Financial 

behaviors 

Marsden, Zick and 

Mayer (2011) 

Survey: Have established long-term goals and are working to fulfill them; has calculated 

retirement needs; has a supplement retirement account; frequency of reviewing retirement 

account statements.  

After receiving financial advice: Increased the amount of money saved regularly; increased the 

amount of money owed; increased the age of expected retirement. Behavioral responses to the 

recent economic crisis: Percentage invested internationally in 2009; number of asset classes in 

2009; percentage allocation to stocks in 2009; percentage of total holdings in small or mid-cap 

funds in 2009; percentage in target retirement date funds in 2009; percentage in actively 

managed funds in 2009. 

Financial 

knowledge 

Britt et al. (2015) Survey: Before and after comparison of objective financial knowledge measured by awarding 

1 point per correct answer to the following questions: a) You may obtain a free copy of your 

credit report each year (true); (b) Higher insurance deductibles lead to lower insurance 

premiums (true); (c) An annuity is a contract issued by a financial institution that guarantees a 

series of payments over a lifetime (true); (d) A mutual fund is an investment company that 

invests its shareholders’ money in a diversified portfolio of securities (true); (e) Social security 

and company pension plans are sufficient to meet retirement needs (false); and (f) Over 20 

years, you will earn more money if you invest in bonds compared to stocks (false). 

Other aspects of wellbeing   

 Mental 

 wellbeing 

 Abbott et al. (2006) Survey: SF-36: domains relating to emotional role functioning; and mental health. 

  Brackertz (2014) Survey: I feel more positive about the future. My mental and/or emotional wellbeing has 

improved (1-5 agree-disagree scale). 

Day et al. (2008) Interviews: topic guide provided: How well clients feel they are coping, compared with 

previous financial situation. Any wider benefits of the advice process – health, employment, 

family, etc.  

Irving et al. (2011) Survey: assess before and after seeking financial advice: mental health and well-being. 

Woodhead et al. 

(2017) 

Survey: General Health Questionnaire (GHQ-12): assesses symptoms of mental distress. 

Shortened Warwick-Edinburgh Mental Well-being Scale (SWEMWBS): assesses positive 

mental health. 

Table 2 continued on next page. 



MacDonald et al. 

149 

Table 2 continued.  
Theme Sub-theme Author (Year) Measures 

 Physical 

 wellbeing 

  

 Abbot et al. (2006) Survey: SF-36: domains relating to physical functioning; physical role functioning; bodily 

pain; self-reported general health; and vitality. 

Brackertz (2014) Survey: My physical health has improved (1-5 agree-disagree scale). 

Day et al. (2008) Interviews: topic guide provided: Any wider benefits of the advice process – health, 

employment, family, etc. 

Irving et al. (2011)  Survey: assess before and after seeking financial advice: physical health and well-being. 

Kim et al. (2003) Survey: 4 items: self-reported health status; experience of health problems; comparison of 

physical health with people their age; experience of stress (noted this is a mental wellbeing 

measure, however for the purposes of this study, all four items were summed to make a 

composite health score). 

 Social 

 wellbeing 

 Abbot et al. (2006) Survey: SF-36: the domain relating to social functioning. 

Brackertz (2014) Survey: My relationship with my family and friends have improved. My relationships with my 

children has improved. (1-5 agree-disagree scale). 

Day et al. (2008) Interviews: topic guide provided: Any wider benefits of the advice process – health, 

employment, family, etc. 

Irving et al. (2011) Survey: assessed before and after seeking financial advice: social activities; social 

relationships; family activities; family relationships. 

Loy et al. (2021) Interviews: What are the key things that financial advisors do that help clients navigate a crisis 

situation? What services do clients need from their financial adviser during a crisis? Has the 

COVID-19 pandemic had any impact on your ability to support and provide advice to clients? 

Table 2 continued on next page. 

  



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150 

Table 2 continued. 
Theme Sub-theme Author (Year) Measures 

Quality of advice 

 

 

 Hunt et al. (2022) Survey: separate surveys for clients and financial planners. Domains include: trust (11 items); 

engagement (9 items); relationship quality (17 items); commitment (10 items); empowerment 

(10 items); ownership (10 items) and client activity (9 items). Exact items not reported but 

original scales are referenced. 

Irving et al. (2011) Survey: A series of 12 agree-disagree statements on the financial planning process (e.g., 

provides a professional service; listens to my ideas and concerns; takes control of planning my 

financial future for me). 

Loy et al. (2021) Interviews: Are there any aspects of the client-advisor relationship that add value for clients 

during times of crisis? How do the relationship aspects of providing advice compare to 

technical advice and services you provide in terms of importance? How have you managed 

relationships with clients during the COVID-19 pandemic? 

Montmarquette & 

Viennot-Briot (2015) 

Econometric model: Positive relationship between having a FA for at least 4 years and the 

level of financial assets compared to a non-advised participant. 

Moderating factors   

 Advisor factors  Irving et al. (2011) Survey: A series of 13 agree-disagree statements on financial planner characteristics (e.g., 

demonstrates a high level of knowledge and expertise in financial planning; provides objective 

advice; is knowledgeable about the performance of investments). 

 Client factors  Loy et al. (2021) Interviews: How have your clients been more/less engaged with their finances and the advice 

process during COVID-19? How have your clients reacted to your firm’s approach to 

technology during the COVID-19 pandemic? 

 Environmental 

 factors 

Regulation & 

Professional 

standards 

Loy et al. (2023) Survey: A series of 8 questions on the impact of regulatory change on an advisor’s ability to 

add value for clients in the short-term and long-term concerning education requirements, 

continuing professional development, introduction of a Code of Ethics, ban on commissions 

(0-10 agree-disagree scale). 



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151 

Table 3. The Value of Financial Advice: A Brief Summary of Some Outcomes 

Theme 

Nature of the 

Outcomes Author (Year) Results 

Financial wellbeing   

 Objective 

 measures 

Results tend to be 

more negative 

than positive 

Bluethgen, 

Gintschel, et al. 

(2008) 

Advised clients have a significantly larger allocation to mutual funds than non-advised 

investors, but increased diversification is achieved by investing in higher cost mutual funds. 

Britt et al. (2015) Limited improvement in clients’ objective financial knowledge. 

Hackethal et al. 

(2012) 

Advised accounts have on average lower net returns and inferior risk-return trade-offs 

(Sharpe ratios). 

Kramer (2012) The portfolios of advised investors are better diversified and carry significantly less 

idiosyncratic risk. 

 Subjective 

 measures 

Mostly positive 

results 

Kim and Garman 

(2003) 

Clients reported feeling more confident making investment decisions. 

Lusardi and 

Mitchell (2011)  

Advised clients were more likely to stick to their retirement plan.  

Marsden, Zick 

and Mayer (2011)  

Working with an advisor is related to several important financial behaviours, 

including goal setting, calculation of retirement needs, accumulation of emergency funds, 

and positive behavioral responses economic crisis. 

Pleasence et al. 

(2007) 

The majority of clients felt more knowledgeable about financial matters after receiving debt 

advice. 

Rehl et al. (2016) Working with a financial advisor significantly improved widows’ financial confidence in 

their current and future financial situations. 

Table 3 continued on next page. 

  



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152 

Table 3 continued.  

Theme 

Nature of the 

Outcomes Author (Year) Results 

Other aspects of wellbeing   

 Mental 

 wellbeing 

Overwhelmingly 

positive results 

Abbott et al. 

(2006) 

Clients who had received an increase in welfare benefits had significant improvements in 

mental health and emotional role functioning at the 12-month follow-up, compared to those 

who did not receive an income increase. 

   Archuleta et al. 

(2020) 

Brief solution-focused financial therapy helped reduced financial anxiety. 

CoreData (2020) The non-advised are more likely to experience negative impacts on relationships, mental 

and physical wellbeing. The advised report improvements in many areas of their lives, 

including their family relationships, social lives, physical health, and work satisfaction. 

These results are witnessed in greater degrees in men compared to women. 

 Day et al. (2008) Clients reported feeling less stressed and relieved after receiving advice, and more 

optimistic about managing their future finances. 

Pleasence et al. 

(2007) 

Clients felt their circumstances had changed for the better following advice; for example, 

they reported less time worrying about their finances; less chance of ‘difficulty living 

normally’; and improved self-reported mental and physical health. 

 Physical 

 wellbeing 

  

Mostly positive 

results, some 

inconclusive 

results 

Abbot et al. 

(2006) 

Bodily pain symptoms improved following advice however no significant improvements 

were reported in general health, vitality, and physical role functioning. 

Kim et al. (2003) In a study comparing active and non-active credit counselling clients, active clients 

improved in self-reported physical health over an 18-month period. Credit counselling had 

an indirect positive effect on health via (reduced) financial stressor events and (improved) 

perceived financial wellbeing. 

O’Neill et al. 

(2006) 

Clients report improved health over time and following advice. Improved health is 

associated with lower incidence of negative financial events, lower financial distress, and 

better financial wellbeing. 

Table 3 continued on next page. 

  



MacDonald et al. 

153 

Table 3 continued. 

Theme 

Nature of the 

Outcomes Author (Year) Results 

 Social 

 wellbeing 

Mostly positive 

results, some 

inconclusive 

results 

Brackertz (2014) Nearly half (45%) of advised clients reported improvements in relationships with children, 

family and friends. 

Irving et al. 

(2011) 

While new clients reported more non-tangible benefits of advice, both new and existing 

clients reported positive benefits to family relationships, family activities, and social 

relationships. 

Loy et al. (2021) Advisors discussed social benefits of the advisor-client relationship, such as offering 

friendship and listening to their concerns about the changing landscape during COVID-19  

Pleasance et al. 

(2007) 

Qualitative results indicated positive improvements in parenting and family relationships, 

however these results could not be established through a randomized controlled trial (RCT) 

due to a lack of statistical power. 

Quality of advice Overwhelmingly 

positive results 

Hunt et al. (2022) Relationship quality in financial advice relationship increased between 2009 and 2016, 

despite turmoil and change within the sector. Trust, engagement, and commitment were the 

key components of the client-advisor relationship according to clients. 

Madamba & 

Utkus (2017) 

Trust is positively associated with investor age and tenure with advisor. Emotional trust had 

the great impact on overall trust. High trust leads to high satisfaction and low likelihood of 

switching advisors. Trust can be undermined by poor investment performance, 

communication issues, neglect, and advisors’ self-serving behavior. 

Montmarquette & 

Viennot-Briot 

(2015) 

Compared to a similar long-tenured (15 years or more) non-advised participant, the advised 

participant has 2.73 times more financial assets. The result is too large to be related to stock 

selection alone and is more plausibly associated with greater savings associated with having 

a financial advisor. 

Table 3 continued on next page. 

  



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154 

Table 3 continued. 

Theme 

Nature of the 

Outcomes Author (Year) Results 

Moderating factors   

 Advisor factors Mixed results Bluethgen, 

Meyer, et al. 

(2008) 

Advisor education was shown to increase adviser overconfidence yet provided better risk-

adjusted returns for clients. 

Hackethal et al. 

(2012) 

Higher investment turnover contributes to lower returns, consistent with commissions being 

the main source of advisor income. 

Hoechle et al. 

(2018) 

A generally independent advisor added value, while conflicts of interest negatively 

impacted value. 

 Client factors Mixed results  Bucher-Koenen et 

al. (2021) 

Women (but not men) with higher financial aptitude reject advisor recommendations more 

frequently. 

  Loy et al. (2023) A lack of financial literacy in clients limits value because the consumer is unaware of what 

an advisor can help with, has a narrow view of what financial advice involves (e.g., 

investments and retirement saving) and/or are unaware of the benefits of advice. 

 Environmental     

 factors 

Mixed results ASIC (2019) 37% of participants agreed they could do just as well as a financial advisor by managing 

their own finances. Some participants who had a good relationship with their own advisor 

still expressed cynicism about the broader financial advice industry. 

 Loy et al. (2023) Financial advisors generally expressed negative sentiments towards regulation and linked it 

to the increased cost to serve clients. However, regulatory changes aimed at increasing 

advisers’ skills (education and continuing professional development requirements) were 

rated as having a positive impact on advisors’ ability to add value for clients, with 

participants viewing these changes as positive in the long-term. 

 

 



MacDonald et al. 

155 

Conceptual Framework 

This review highlights the complexity and 

multidimensional nature of value in the context 

of personal professional financial advice. 

Figures 1, 2, and 3 address RQ3 by synthesizing 

the literature and offering conceptual guidance 

for future research. These figures explore the 

value of financial advice through three lenses: 

1) the financial advice environment; 2) the 

client-professional relationship; and 3) client 

wellbeing outcomes, informed by social support 

theory as a novel conceptualization of value. 

Figure 1 illustrates the financial advice 

environment placing the client-advisor 

relationship at its core and situating it within a 

broader context of key environmental factors 

and stakeholders. This model is particularly 

relevant for understanding the opportunities and 

constraints faced by Australian financial 

advisors, especially in light of ongoing 

regulatory reforms and the timeframe over 

which changes have taken place and continue to 

occur. Importantly, this model is adaptable to 

other jurisdictions, offering a comparative lens 

for international research.   

Figure 1. The Financial Advice Environment 

 

Note: Reproduced from authors’ own work in Loy et al., 2023  

Figure 2 shifts focus to the client-advisor dyad, 

presenting financial advice as an interactive, 

relational, and reflective process. Thematic 

analysis underpinning this review reveals that 

client outcomes extend beyond financial 

metrics (subjective and objective measures), to 

encompass mental, physical, and social 

wellbeing. The findings of this narrative review 

suggest that a well-rounded financial advisor 

often functions similarly to a support provider. 

Accordingly, value is conceptualized as a 

dynamic and evolving process that, amongst 

other moderating variables, is shaped by advisor 

actions throughout the financial planning 

process.  

Social support theory provides a compelling 

framework for examining the dual role of 

financial advisors as both technical experts and 

emotional supports. It emphasizes the 

importance of timely, adequate support in 

stressful situations, the strength of dyadic 

relationships in fostering resilience and growth, 

and the interconnectedness of wellbeing 

domains (e.g., Cohen & Wills, 1985; Feeney & 

Collins, 2015; Holt-Lunstad, 2018). Figure 2 

overlays advisor actions onto Cohen & Wills’ 

(1985) four functional domains of social 

support: 1) emotional and esteem support – 

offering empathy and validation; 2) social 

support – spending time to alleviate financial 

stress; 3) informational and appraisal support – 

providing facts, feedback and educational 

guidance to enhance financial knowledge and 

capability; and 4) instrumental support – 

delivering financial products and services. 

Administrative 

Broader 

environment 

CONSTRAINT

S 

Business 



  Financial Services Review, 33(4) 

156 

 

Figure 2. The Dynamics of the Client-Advisor Relationship

 

Note: Reproduced from authors’ own work in Loy et al., 2023 

To realize the full potential of the financial 

advice profession, particularly in addressing 

unmet needs such as retirement planning, 

greater research attention must be directed 

towards client outcomes. While Figure 2 

presents an interdisciplinary model of wellbeing 

and support, Figure 3 extends this approach by 

offering a model that encapsulates the 

multifaceted nature of value in financial advice. 

It recognizes that a single advisor action may 

influence multiple wellbeing domains and that 

these outcomes are interrelated, with direct 

effects in one area potentially producing 

indirect effects in others.  

This narrative review lays the foundation for 

future research by offering recommendations in 

the next section. These aim to guide further 

exploration of existing value constructs using 

innovative methodologies and to expand the 

literature through new conceptualizations of 

which Figure 3 serves as a key exemplar. 

 

Figure 3. The Value of Financial Advice: A Conceptual Framework 

 

Note: Adapted from authors’ own work in Loy et al., 2021, 2023 

Conclusion 

In an increasingly complex and information-

rich world, individuals face heightened 

uncertainty and decision fatigue, prompting a 

growing reliance on expert advice. Financial 

advisors are widely recognized as experts; 

however, consumer trust in the long-term 



MacDonald et al. 

157 

outcomes of financial advice remains limited. 

Historically, the value of financial advice has 

been assessed primarily through objective 

financial metrics such as investment 

performance and returns. Yet, while extant 

literature is extensive, it is fragmented and lacks 

a cohesive synthesis particularly in relation to 

how value is conceptualized and measured 

across diverse contexts and over time.  

This narrative review identifies a critical gap in 

the literature: the absence of a holistic 

framework for evaluating the value of 

professional financial advice. Without such a 

framework, the collective body of research 

struggles to inform policy and practice 

meaningfully. Moreover, the literature has paid 

insufficient attention to the advisor’s role in 

shaping client outcomes through relational and 

emotional support. Emerging research suggests 

that subjective benefits such as increased 

confidence, financial capability, and overall 

wellbeing may be equally, if not more, 

important than traditional financial metrics. 

To address these gaps, this review synthesizes 

peer-reviewed and high-quality grey literature 

to provide a comprehensive overview of 

financial advice. It offers a conceptual 

framework that integrates advisor actions, client 

characteristics, and environmental factors, with 

the aim of guiding more rigorous and coherent 

research to inform stakeholders including 

financial services professionals, licensees and 

policymakers, on strategies to substantiate the 

perceived and actual value of financial advice 

and thus, more credible information and 

transparency for consumers. By engaging a 

broader and more diverse client base, the 

financial advice sector can unlock significant 

and social benefits. 

As with all narrative reviews, this paper is 

subject to limitations. Although article selection 

and quality assessment were conducted 

systematically, the breadth of the literature 

(over 330 articles) necessitated a thematic 

approach, which may have excluded some 

nuances.  Whilst care was taken to ensure 

objectivity, narrative synthesis inherently 

involves subjective judgement (Bourhis, 2017). 

Nonetheless, this review deepens and extends 

understanding of scholarship on the value of 

professional financial advice and the conceptual 

framework offers a valuable foundation for 

future empirical work. 

To advance the research agenda, several key 

areas warrant attention. 

(1) Longitudinal research designs 

Longitudinal research design is recommended 

(e.g., MacDonald et al., 2023; Pleasence et al., 

2007) to overcome several limitations of 

existing work to progress the research agenda 

on value. The credence nature of financial 

advice means its value cannot often be assessed 

until long after it is delivered. Longitudinal 

studies are essential to capture delayed 

outcomes, particularly those related to client 

wellbeing. Such designs can illuminate both 

moderating factors (what influences the advice 

process and outcomes) and mediating factors 

(how the various aspects of advice lead to 

wellbeing outcomes), enabling a more nuanced 

understanding of value. 

(2) Causal inference and methodological rigor 

Much of the existing literature is observational, 

limiting the ability to draw causal conclusions. 

Future research should incorporate 

experimental or quasi-experimental designs to 

better isolate the effects of financial advice and 

advisor actions. 

(3) Addressing self-selection and endogeneity 

A persistent challenge in advice research is 

disentangling whether clients benefit from 

advice because they seek it, or whether those 

who seek advice are already better positioned to 

benefit. Future studies should explore 

counterfactual scenarios and alternative 

comparison groups to better understand the true 

impact of advice. 

(4) Contextualizing value 

Value is inherently subjective and varies across 

clients and life stages. For example, higher 

investment returns may not be valuable to a 

risk-averse retiree. Research should explore 

how value is interpreted relative to individual 

client goals, preferences, and circumstances. 

(5) Testing the conceptual framework 

While this paper suggests not all types of 

support are necessary, the framework presented 

posits that clients derive the greatest value when 

the advisor actions align across all domains of 

social support. Future research should 

empirically test this proposition examining how 

combinations of advisor behaviors influence 

different dimensions of client wellbeing. 



  Financial Services Review, 33(4) 

158 

(6) Adapting to emerging trends 

The rise of robo advice, evolving regulatory 

environments, and shifting client demographics 

present new challenges and opportunities. 

These trends should be incorporated into future 

studies to assess the robustness and adaptability 

of the conceptual framework.  

In conclusion, the value of financial advice is 

multifaceted, dynamic, and deeply personal. A 

one-size-fits-all approach to measuring value is 

insufficient. The conceptual framework 

developed in this review provides a foundation 

for more rigorous, interdisciplinary, and 

context-sensitive research. By embracing 

complexity and focusing on both tangible and 

intangible outcomes, future scholarship can 

better capture the true impact of financial advice 

and contribute to more effective policy, 

practice, and client engagement. 

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