Trust and personal connections, as well as other emotional factors, account for about 41% of the perceived value that clients place on financial advice, according to a study by Vanguard focused on the role of emotions in the relationships between clients and advisors.

The study found that traditional factors such as portfolio management and financial planning contribute to 59% of the perceived value.

“Our research has quantified the role of emotions in the advisory relationship,” the report said. “We believe that, going forward, assessments of the value of financial advice should include an evaluation of the emotional value it provides investors.”

The study concluded that there are three main components to the value that investors place on their relationship with advisors: portfolio value, financial value and emotional value.

The portfolio value has to do with optimal portfolio construction and client risk-taking and includes factors such as a portfolio’s risk versus its return characteristics, tax efficiency, fees and rebalancing and trading activity, the study said. Financial value encompasses saving and spending behavior, debt levels, retirement planning, insurance and risk management and estate planning.

Emotional value, meanwhile, is tied to a client’s peace of mind, the report said. This includes a client’s trust in the advisor and the markets, his or her success and sense of accomplishment, the level of behavioral coaching provided by the advisor and the client’s confidence, the report said.

The report found that even for robo-advisor clients, 38% of the value they place on the services they received from institutions is tied to emotional factors, but with more of a focus on a client’s need for transparency and the feeling of empowerment when using the services.

The study noted that fees were not as large a factor in clients’ thinking as some might expect because the majority of advised investors are not knowledgeable about what they pay for advice.

“This lack of investor comprehension in regards to how much they pay for advice highlights an opportunity for the industry to disclose fees in a more clear and transparent manner,” said Cynthia Pagliaro, a senior researcher at the Vanguard Investment Strategy Group and co-author of the paper. “Cost transparency would greatly benefit advisors, as it would enable them to better articulate the value of their service to clients in relation to the fees they charge.”

The study used surveys and interviews to assess the value clients placed on 24 key value attributes that could be categorized as either emotional or functional. Emotional attributes included factors such as “trusting that the advisor will put my needs first,” the report said. Functional attributes included things such as maximizing investment returns and balanced saving and investing. About 2,000 investors involved in an advisor relationship were surveyed, Vanguard said.

Survey respondents revealed that a lot of what they value in advisors falls outside traditional benchmarks such as portfolio performance and into the realm of emotional satisfaction, the report’s authors said. For example, clients placed high value on knowing their financial plans are regularly monitored by their advisors and on whether they had a personal connection with their advisors. They also are looking for regular proactive outreach from their advisors and reassurance from their advisors that things will be OK during market downturns, the report said.

“Relationship and rapport are important to perception,” the report stated. “Financial advisors would fall short of their client’s expectations if they only highlight their investment expertise and portfolio outcomes. Just as important is for them to cultivate a deeper relationship with their clients.”