WHY WORK WITH A
FINANCIAL ADVISOR?
Because that relationship may be oneof your best investments.

2024

Not a Deposit • Not FDIC Insured May Lose Value • Not Bank Guaranteed
Not insured by any Federal Government Agency

Russell Investments / Why work with a financial advisor?

/1

INTRODUCTION
What’s next? That is the eternal question we can ask ourselves about life – and about thefinancial markets.
Without a crystal ball there is no way of knowing what may come next in either our lives or inthe markets. That’s why we should always be prepared for any potential situation. But we cangenerally assume that our lives will follow a certain pattern – we’re most likely going to navigate
careers, relationships, and major financial events (like having children or buying a home) until
we get to an age where we then enjoy the fruits of our labors.
We can’t make such assumptions about the markets, however. There are any number of
unforeseen events that could jostle them. Just consider the past few years in which the markets
have been buffeted by wars, a global pandemic, corporate bankruptcies, surging inflation, or theemergence of accessible artificial intelligence. We just can’t predict what may be on the horizon.
And in a year where more than half of the global population1 is going to elect new leaders, thepotential for volatility is significant.
That’s why we at Russell Investments believe all investors should work with a financial advisor.
We believe advisors are never more important than during periods of the unknown – which,frankly, is all the time! We truly can never know what may come next in our lives or the markets.
We believe that advisors play a critical role in steering investors through the various market
environments they may encounter over their lives – and through the various major life events
they undergo. Indeed, for more than a decade we have conducted an annual study into thevariety of services that an advisor typically provides to their clients. We’ve also estimatedthe value that represents. And year over year, our Value of an Advisor study has indisputably
shown that an advisor who delivers holistic wealth management services provides value that far
exceeds the typical fee charged.

Our study is based on a simple formula that shows the value that advisors add byhelping ordinary people gain financial security.

AB

Activerebalancing
and asset
allocation

Behavioral
Coaching

C
Customized
family wealthplanningT
Tax-Smartplanning &investing

1
Source: https://www.economistgroup.com/group-news/the-economist/2024-will-put-a-spotlight-on-the-global-state-of-democracyas-more-people

Russell Investments / Why work with a financial advisor?

/2

AIS FOR ACTIVE REBALANCING
AND ASSET ALLOCATION

Rebalancing is a critical component of wealth management, but your advisor may never have discussed
it with you.
Why? Well because many advisors take rebalancing for granted. It’s often automated once your asset
allocation is determined. Let’s remember that your asset allocation was selected to fit your goals,
circumstances and preferences. Rebalancing ensures that your asset allocation – or the mix of equities,
fixed income, alternatives and other assets in your portfolio – remains in line with the level of risk thatyou feel comfortable with.
It’s unlikely you would rebalance your portfolio on your own. Rebalancing is buying more of thesecurities in your portfolio that have fallen and selling those that have risen. In other words: sellingwinners and buying losers. Would you do that willingly? Probably not.
That’s why we consider rebalancing a vital activity for an advisor to do. By ensuring your portfolio isregularly rebalanced, your advisor is making sure that it remains in line to the original mix of stocks,
bonds, cash, and alternatives. Remember, that asset allocation was chosen to fit your risk comfort zone.
What could happen if your portfolio wasn’t regularly rebalanced? Let’s say you purchased ahypothetical balanced portfolio of 60% equities and 40% fixed income in January 2004 and neverrebalanced. By the end of 2023 the portfolio would look very different. That original balanced portfolio
would have become a growth portfolio, with approximately 81% invested in equities and only 19% in
fixed income. Any downturn in equity markets would hit that lopsided portfolio particularly hard. More
importantly, the allocation to U.S. large-cap growth would have more than doubled in the period. Whilethat kind of heavy weighting in U.S. large-cap growth may have given you stellar returns over the past
decade, any sudden reversal would have an outsized impact. That would not be a pleasant experience.

WHEN BALANCED BECOMES THE NEW GROWTH
The potential result of an un-rebalanced portfolio

The drift
was most
pronounced:

Total
EquityAllocation

35%

Large CapGrowth
Allocation

121%

Large
Cap ValueAllocation

21%

Fixed
IncomeAllocation-51%

Hypothetical analysis provided in the chart and table above is for illustrative purposes only. Not intended to represent any actual investment.
Source: U.S. Large Cap Growth: Russell 1000 Growth; U.S. Large Cap Value: Russell 1000 Value; U.S. Small Cap: Russell 2000;
International Developed: MSCI EAFE; Emerging Markets Equity: MSCI EM; Global Real Estate: FTSE NAREIT All Equity REITs Index :Fixed Income: Bloomberg U.S. Aggregate Bond. ​3/

Why work with a financial advisor? / Russell Investments

BIS FOR BEHAVIORAL COACHING

What happens when markets get jittery. Do you get jittery too? If so, you’re a normal investor.
When it comes to our retirement savings, most of us prefer a smooth climb over the years.
You may be okay with a little volatility, but wild swings in the markets could prompt you to pullout your investments and lie low for a while. That would be a mistake: after all, markets havetraditionally bounced back from major declines. Indeed, the S&P 500 Index has ended the year
positively 74% of the time from 1926-2023.
That’s why advisors who keep their clients calm – and invested - during volatile periods havevalue.
Investors who are left to their own devices are prone to chase performance. Similarly, investors
are prone to vote with their feet when markets get difficult. The chart below shows the flow ofmoney into and out of U.S. open-ended mutual funds and passive ETFs over the 16-year period
ending December 2023.
The orange bars represent the net flow of cash, while the blue line represents the returns for the12- month trailing period from the purchase date. As you can see, the flows into mutual funds
and ETFs lagged the blue line both up and down. That means investors bought into the market
after it had already begun to climb and sold after it had begun to fall. In other words, theybought high and sold low.

INVESTORS DON’T ALWAYS DO WHAT THEY SHOULD
Recent demonstration of a “buy high and sell low” mentality
2007 - 2023 U.S. open ended mutual fund and ETF flows vs market

Data shown is historical and not an indicator of future results. Sources: Morningstar Direct. Flows include active
and passive categories; Monthly open-end mutual fund and ETF flows. Data as of December 2023. U.S. Stocks
represented by Russell 3000 Index. Index performance is not indicative of the performance of any specificinvestment. Indexes are not managed and may not be invested in directly.

Your advisor can protect you from your natural human instinct to act contrary to your best interests involatile markets.

Russell Investments / Why work with a financial advisor?

/4

C

IS FOR CUSTOMIZED EXPERIENCEAND FAMILY WEALTH PLANNING

We can all agree that our society has become more complicated and so have our lives.
Your advisor can help you through the many events you are likely to go through over yourinvestment journey. Indeed, many advisors now offer a multitude of services, that can cover
everything from your insurance needs, your wish to leave a legacy, your charitable planningand other goals – even helping you structure your investments to reflect your value.
Often, advisors build a network of experts—estate lawyers, insurance planners, accountants,
lifestyle consultants – to help you create a holistic retirement plan that considers more thanjust how much money you will have to spend. It can help you ensure there is an orderlytransfer of wealth, and consider your family’s overall financial situation.
This is more than just a basic financial plan and selecting assets for your portfolio. It’s likelythat you and members of your family – your spouse and perhaps your children – meet withyour advisor regularly to discuss recent life changes and evolving financial goals. All of you
together are helping build an investment plan that considers your family’s unique goals, needs
and circumstances.
The extra services and deeper discovery conversations, the expanded planning andcoordinating are time-consuming. Personalized services are quite different from basic financial
plans. This can represent significant value to you as it can ensure a customized financial
journey.

THE WEALTH MANAGER OF THE FUTURE
Financial Planning
Trust Services

Wealth Education

Cash Management

Succession Planning

Tax & Estate Planning

Family RelationshipManagement

Income & Distribution
Execution

Lifestyle & Leisure

Industry & TechnicalInformation

Career & Work

Asset Allocation
Manager Selection

Community & Giving
FAMILY WEALTH MANAGER

5/

Why work with a financial advisor? / Russell Investments

T

IS FOR TAX-SMART PLANNING &INVESTING

Taxes can be complicated and confusing.
You can review your tax forms and identify how much tax you have paid on capital gain
distributions, dividends, and interest payments received from your investments. But thosearen’t the only taxes that may impact your net returns – the money that goes into your pocket.
There are also investment and implementation decisions that result in more money going intoUncle Sam’s pocket. Those are difficult to see and even more difficult to understand.
Working with a tax-smart advisor, who incorporates tax management into the investment
process, can help you reduce the taxes on your portfolio and add substantial value.

COMMON TAX COSTS• Capital gain distributions• Dividends• Interest

HIDDEN TAX COSTS••••

Asset allocation change
Fund/money manager changes
Portfolio rebalancing
Inefficient trading activities

We call the tax costs that impact a portfolio’s returns tax “drag.” When your advisor considers
the impact of taxes throughout the entire investing process – from initial asset allocation tomanagement of taxable and tax-deferred portfolios, to the most tax-efficient ways to withdraw
funds – they can take action to reduce that tax drag.
One of the simplest actions an advisor can take is to incorporate tax-managed funds into theinvestment portfolio. Tax-managed funds pay little to no distributions. That means you won’t
pay taxes on those distributions. Instead, that money is left in your portfolio where it has thepotential to continue growing.

Russell Investments / Why work with a financial advisor?

/6

WHY WORK WITH A FINANCIAL ADVISOR?
Because that can be your best investment.
Wealth planning is one of the most important services an advisor can provide to you, and it requires an indepth understanding of your entire personal and financial situation. Professional guidance to uncover andcomprehend what’s most important to you takes time and knowledge.
With the wealth of information available to us now, you may think you understand the markets enough toinvest for yourself or that getting a financial professional to manage your assets is expensive. However,investing is challenging, and emotional responses in period of volatility can undo years of past or future
success. The worth in having an advisor to filter capital market news or your own emotions can create
significant value when it is needed most.
The services an advisor provides exceed simply selecting investment products for you. Investment advisors
can conduct a full 360-degree spectrum of wealth planning, from investments to retirement and estateplanning, for you and your family. They can also provide guidance on taxation to increase the amount of yoursavings that stay in your pocket and not in Uncle Sam’s.
The list below shows some of the most important services an advisor can provide, all of which we believe
hold value to you, the investor.

A for active rebalancing & active allocation
B for behavior coaching
C for customized experience and family wealth planningT7/

for tax-smart planning & investing

Why work with a financial advisor? / Russell Investments

FOR MORE INFORMATION:
Call Russell Investments at 800-787-7354
or visit russellinvestments.com.

Fund objectives, risks, charges and expenses should be carefully considered before investing.
A summary prospectus, if available, or a prospectus containing this and other important information
can be obtained by calling (800) 787-7354 or visiting https://russellinvestments.com. Please read aprospectus carefully before investing.

IMPORTANT INFORMATION AND DISCLOSURES
Please remember that all investments
carry some level of risk, including thepotential loss of principal invested. They
do not typically grow at an even rate of
return and may experience negativegrowth. As with any type of portfolio
structuring, attempting to reduce risk andincrease return could, at certain times,
unintentionally reduce returns.
Diversification and strategic asset allocation
do not assure profit or protect against loss
in declining markets.
The Investment Company Institute is
the national trade association of U.S.
investment companies, which includes
mutual funds, closed-end funds, exchangetraded funds and unit investment trusts.
Bloomberg Barclays U.S. Aggregate Bond
Index: An index, with income reinvested,
generally representative of intermediateterm government bonds, investment grade
corporate debt securities, and mortgagebacked securities (specifically: Barclays
Government/Corporate Bond Index, theAsset-Backed Securities Index, and theMortgage-Backed Securities Index).
FTSE EPRA/NAREIT Developed Index: A
global market capitalization weighted index
composed of listed real estate securities in
the North American, European and Asian
real estate markets.
MSCI Emerging Markets Index: A
float-adjusted market capitalization index
that consists of indices in 21 emerging
economies: Brazil, Chile, China, Colombia,
Czech Republic, Egypt, Hungary, India,Indonesia, Korea, Malaysia, Mexico,Morocco, Peru, Philippines, Poland, Russia,South Africa, Taiwan, Thailand, and Turkey.
The MSCI EAFE Index is an equity
index which captures large- and midcap representation across 21 developed
markets countries around the world,excluding the U.S. and Canada. With
918 constituents, the index covers
approximately 85% of the free floatadjusted market capitalization in eachcountry. Countries include: Australia,Austria, Belgium, Denmark, Finland,France, Germany, Hong Kong, Ireland,Israel, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Singapore,Spain, Sweden, Switzerland and the U.K.
The MSCI World ex U.S. Index tracks
global stock market performance that
includes developed and emerging markets
but excludes the U.S.
The Russell 1000® Growth Index
measures the performance of the large-cap
growth segment of the U.S. equity universe.
It includes those Russell 1000 companies
with higher price-to-book ratios and higher
forecasted growth values.
The Russell 1000® Value Index measures
the performance of the large-cap value
segment of the U.S. equity universe. It
includes those Russell 1000 companieswith lower price-to-book ratios and lower
expected growth values.
The Russell 2000® Index measures theperformance of the small-cap segment ofthe U.S. equity universe. The Russell 2000
Index is a subset of the Russell 3000®
Index representing approximately 10% of
the total market capitalization of that index.
It includes approximately 2,000 of thesmallest securities based on a combinationof their market cap and current index
membership.
The Russell 3000® Index measures theperformance of the largest 3,000 U.S.
companies representing approximately
98% of the investable U.S. equity market.
The S&P 500® Index is an index, withdividends reinvested, of 500 issues
representative of leading companies in theU.S. large cap securities market.
Indexes are unmanaged and cannot beinvested in directly. Returns represent past
performance, are not a guarantee of future
performance, and are not indicative of any
specific investment.
Past performance does not guarantee
future performance.

Nothing contained in this material isintended to constitute legal, tax, securities,
or investment advice, nor an opinion
regarding the appropriateness of any
investment, nor a solicitation of any type.
The general information contained inthis publication should not be acted upon
without obtaining specific legal, tax,
and investment advice from a licensed
professional.
Russell Investments’ ownership is
composed of a majority stake held by funds
managed by TA Associates Management,L.P., with a significant minority stake
held by funds managed by Reverence
Capital Partners L.P. Certain of Russell
Investments’ employees and Hamilton Lane
Advisors, LLC also hold minority, noncontrolling, ownership stakes.
Frank Russell Company is the owner ofthe Russell trademarks contained in thismaterial and all trademark rights related
to the Russell trademarks, which themembers of the Russell Investments groupof companies are permitted to use underlicense from Frank Russell Company.
The members of the Russell Investments
group of companies are not affiliated inany manner with Frank Russell Company
or any entity operating under the “FTSE
RUSSELL” brand.
Securities products and services offeredthrough Russell Investments Financial
Services, LLC, member FINRA, part ofRussell Investments.
Copyright 2024 Russell Investments Group,LLC. All rights reserved. This material isproprietary and may not be reproduced,transferred, or distributed in any form
without prior written permission from
Russell Investments. It is delivered on an“as is” basis without warranty.
First used: May 2024. Updated: June 2024.
RIFIS-26024 [Exp.6/25]

russellinvestments.com