FECIF Editorial | October 2026

When we set out to write this paper, we knew we were entering a debate that has, for years, been dominated almost entirely by cost. On the EU level, the "Value for Money" framework asks a narrow question: are the costs of investment products and advice justified and proportionate? It is the right question — but it is only half the equation. We wanted to take the time to look at the other side: what does a client actually receive for their money? What is the net plus — the surplus — that remains once the value of advice is weighed against its cost?

So over the past months we reviewed more than two decades of international research on the subject and combined it with a new representative survey commissioned from the German Institute for Wealth Accumulation and Retirement Provision (DIVA), covering 2,000 citizens. The paper we produced we called "Das Beratungs-Plus" — the Advice Surplus. Because we know the objection: advice costs money, and to some that looks like a deduction from something that is meant to grow. We wanted to take the time to actually weigh that cost against what sits on the other side of the ledger — and see what remains once the two are set against each other.

What the data show

To get past anecdote, DIVA surveyed 2,000 people across Germany, comparing those who had received personal financial advice in the past five years with those who had none at all. Our own contribution was to place that survey inside the two decades of international research we had spent months reviewing — and what stood out was how consistently the German data confirmed the wider pattern. Across nearly every dimension tested, DIVA found advised people start saving for retirement earlier in life, and once they start, keep at it — putting aside a larger and steadier share of their income than those without advice. They understand their own financial situation better: where an unadvised person is often unable to explain a basic idea like risk diversification, DIVA found an advised one usually can. And when life throws something unexpected at them — a sudden loss of income, an emergency expense — the survey found advised households simply better placed to absorb it, because they have something set aside.

Perhaps DIVA's most telling finding is that people credit advice itself for this shift. More than half of advised respondents told the survey it was only through a conversation with an advisor that they understood how to save and plan for old age at all — that without it, they likely would never have taken out the contracts protecting them today. Nearly as many said advice took away a fear they had carried around financial products for years. This is not a marginal effect. It is, for a great many people, the difference between provision and drift.

A body of work that points the same way

The DIVA findings are not standing alone. Vanguard's research team estimates that good advice adds up to three percentage points of return per year for the investors it studied, with the single largest factor being what it calls "behavioral coaching" — an advisor talking a client out of panic-selling during a downturn and keeping them invested through the cycle. Russell Investments, in a 13-year study, puts this specific behavioural effect at 2.3 percentage points annually. Financial planning researchers David Blanchett and Paul Kaplan found that comprehensive planning — coordinating withdrawal strategy, tax efficiency and overall allocation — generates what they term a "Gamma" of 1.82 percentage points a year, equivalent to roughly 29% more retirement income. A 2014 study of workplace pension participants by Aon Hewitt and Financial Engines found advised savers achieved 3.32 percentage points higher median net returns annually — over twenty years, nearly a doubling of final wealth.

On saving behaviour specifically, Canadian economists Montmarquette and Viennot-Briot found that several years of advice raises the probability of a positive savings rate by 26 percentage points, driven by higher savings rates, better diversification and tax optimisation rather than speculation. Swedish researcher Cathrine Hermansson, using a difference-in-differences design that tracks the same households before and after an advisory conversation, found advice meetings measurably raise monthly savings rates. And on the question of who benefits most, work by von Gaudecker and by Wang et al. both point to the same pattern: the gain from advice is largest precisely where financial literacy is lowest — advice appears to substitute for what schooling and upbringing never provided.

The value extends beyond the numbers. Vanguard's 2025 client survey found 86% of advised investors report greater peace of mind, and the Financial Planning Standards Board's global consumer survey found roughly half of financial planning clients across 15 countries report a positive effect on their mental health and family life — findings that echo, closely, what German respondents told DIVA about feeling calmer and more confident about their financial future.

Advice is life management, not product placement

A recurring misunderstanding in the public debate is to treat financial advice as essentially selling a product — a pension plan here, an insurance policy there. Our paper argues this gets the value proposition backwards. Good advice maps the whole of a person's financial life: protecting against the risk of losing one's income to illness or disability, building a liquid reserve for the unexpected, financing a home, investing for the long term, managing and eventually clearing debt, and — of course — providing for retirement. None of these sit in isolation. Take away income protection, and a decades-long savings plan rests on nothing. Take out a mortgage, and it reshapes everything else in a household's financial architecture. Without liquid reserves, people are forced in a crisis to break open exactly the contracts meant to carry their old age. No single digital product, and no isolated online purchase flow, can see these connections — only a conversation that looks at the whole picture can. The academic literature on advisor "alpha" makes precisely this point: the value advisors add comes overwhelmingly from this kind of holistic planning, not from picking better products.

Why retirement provision needs a human push

Nowhere is this clearer than in retirement planning, which people postpone more reliably than almost any other financial decision — the benefit lies decades away, the sacrifice starts today, and there is no natural moment that forces the issue. Nobody sits down on an ordinary evening and spontaneously decides to sort out their pension. One well-known German field experiment makes the point sharply: when a major direct bank proactively offered its own customers free, independent, genuinely advantageous investment advice, only a small fraction took it up. Even advice offered for nothing finds few takers unless someone actively reaches out and walks people through it.

A call to policymakers

If advice genuinely delivers this kind of value — and if the real problem is simply that too few people ever receive it — then every regulatory measure ought to be judged by one question: does it make qualified advice easier to reach, or harder? VOTUM's paper argues that several developments now under discussion risk the latter: bans or caps on commission-based remuneration, which risk making advice unaffordable for exactly the households who need it most; ever-growing documentation requirements that lengthen every advisory meeting without making clients any better off; rules that carve advice into separate product silos when its real value lies in seeing the whole picture; and a political tendency to treat state defaults and self-service digital pathways as the model everyone should follow, rather than as one option among several.

Our appeal to policymakers is therefore simple: advice should not be hampered — it should be enabled. A profession that measurably helps people start saving earlier, put more aside, understand more about their own finances, and face the future with greater confidence deserves a framework that keeps it viable. Not for its own sake, but because for millions of people, it is the only path that actually gets them to provide for their future at all.

Martin Klein

Martin Klein is the managing board director of VOTUM Verband. A qualified lawyer, Klein joined VOTUM's management in the early 2000s and became its managing director in 2006, at age 39. He has since led VOTUM through the implementation of MiFID II and IDD, Germany's ongoing pension reform debate, and the EU's Retail Investment Strategy negotiations.

His legal practice focuses on distribution law, financial services law and liability law. Klein is a lecturer in distribution law at the Schmalkalden University of Applied Sciences and a sought-after speaker at industry conferences for financial services professionals. He also sits on the supervisory boards of several financial services companies and serves as a board member of a foundation.