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I come across a lot of averages and rules of thumb in the financial planning profession. While they can be helpful at times, they can also be dangerously wrong. As a non-financial example, the average depth of the Chesapeake Bay is 21 feet. That’s interesting information, but hardly useful if you are going to navigate a large vessel through its waters.

One of the largest obstacles financial advisors have is explaining what we do and how it benefits clients. Most of the advice that is delivered is intangible, making it difficult to quantify the value of that advice. Several recent studies, which attempt to provide more definition around this, have been summarized by Michael Kitces into the following one page summary.