Providing a perspective on events and trends in the financial markets is the most valuable service US advisors think they are giving to clients, a new survey by Russell Investments shows.

In the latest Financial Professional Outlook report, 55 per cent of advisors said maintaining perspective is their most valuable service, followed by creating a retirement income plan (39 per cent), and then reducing portfolio volatility (34 per cent). 

However, disparity is revealed when the respondents were asked how their clients view what services held the most value. Fifty-six per cent said customers felt protecting the portfolio principal was an advisor's most important service, followed by 48 per cent who said it is providing sufficient income. Among the advisors, however, less than a quarter agreed that either of these is the most valuable service they provide. 

"Advisors are constantly trying to strike a balance with their clients and this isn't an easy feat, especially in the current volatile environment," said Phill Rogerson, managing director for consulting and product development. 

The report also shows that there appears to be no consensus in how advisors approach retirement income planning challenges. When asked what tools they use to facilitate conversations with clients with unrealistic expectations on retirement, about 37 per cent say they use a detailed plan, followed by 16 per cent who give a presentation about how to think about retirement and 14 per cent who say they use a blank piece of paper. 

"It took the industry fifty years of research for Modern Portfolio Theory to evolve, but the decumulation phase is materially different and the focus on this is relatively new, so it is not surprising that the approach to generating income in retirement is still developing," said Rogerson.

"Investors are increasingly looking for personalized and flexible investment plans that allow them to maintain their standard of living in retirement and mitigate the risk of running out of money, and advisors must recognize that traditional investment approaches have to evolve to meet these in-retirement needs," he added.

The results were based on the collected opinions of 374 financial advisors working in 150 national, regional and independent advisory firms around the US. The survey took place between 28 July and 12 August 2011.