You’ve seen those commercials that basically say your financial advisor is robbing you of 30% of your wealth?!
Fees.
The topic of conversation.
What do you value your money at?
It’s not a rhetorical question but rather one that literally you answer everyday by the representation of the goods and services you purchase and you put value on.
Here’s the deal.
When it comes to investing, you can do it yourself.
And sure, you can pay less.
HOWEVER, studies, and massive amount of studies have proven that investors with advice were found to accumulate 290% or 3.9 times more than people working without an advisor over a 15-year period. (The Gamma Factor and the Value of Financial Advice, 2016 Study.)
This makes sense for obvious reasons, one of which is: anyone on the planet who is trying to better themselves seeks help. You go to university to get a degree, you go to a doctor to get better, you go to a financial advisor to get financial help.
OBVI.
There’s more to a financial advisor than just helping you with choosing an investment, more importantly, as I’ve always said – ‘who cares if you made 100% but were taxes 100% on your investment!’ Point being made that taxes are a HUGE consideration when investing and being able to create a current and long term plan on how you wish to one day draw down those assets or to distribute them according to your will.
Tax planning is a huge consideration.
Financial professionals also help with guidance, planning, documents and reporting/tracking, research, goal setting, administration, education, and estate planning to name a few.
All which you are welcome to do on your own.
I know that the people who read this blog are actually the happy ones who know that they receive value and are happy to pay for services that they value.
That’s feminine energy. (Again, not referring to females but the energy type.)
The opposite is true.
I understand being fee conscious! I am fee conscious for all my clients and I monitor that, however, there is something to be said about relationships.
Did you ever read my Huffington Post article called, “Are you treating your investments like a one-night stand?” (Go read it!)
That article illustrates that being in relationship long-term with a financial professional will actually have your greatest positive financial impact, meaning, they know you, your family, your situation, your goals.
Going in once a year for a quickie tax return and a 2-minute RRSP into a GIC at your bank with a new bank employee every time you walk in is probably not the relationship that will benefit your wealth long term.
Having a relationship with someone you can text, email and call directly (not a call center!) is huge. I know I value being able to talk to someone who knows who I am.
I tell clients this. At most (and I do mean most) financial institutions, you are paying the same fees as if you go directly with an independent advisor, so for the same price, you may as well get some value from it.
And those commercials?
Well, if you really want to get into the nitty-gritty of Q-Trade commercials, I have had colleagues run the numbers and you can email me for the results – seriously, you already know what they are going to say – it’s all fake news.
What makes it worse is that hard-working people will see those commercials and think that financial advice is to expensive or worse, they will do nothing, and that is not helpful!
When it comes to investing, these are your options, my love, these are all your options (!!) :
- Invest nowhere, do nothing
- Invest at Big Large Institution (Bank)
- Invest with work (group RRSPs/Pensions/etc. you don’t have much choice, mandatory for the most part)
- Invest online with a brokerage account (DIY)
- Invest with a financial planner (Independent for the most part)
Those are really your options.
Review them carefully.
Also note, most people have money in all of these things! I encourage my clients to have a DIY stock account – not tied up with the whole of their wealth, but it’s a great way to learn about the markets.
Plus, most of my clients also have some form of a work plan and on that note, we use banks for banking so many people may have some high interest savings accounts etc.
There is no right or wrong way to invest.
A full financial planner will look at the entire financial picture and explain to you how each fits in and each has their place and do a full tax planning review on ALL your investments and real estate and show you the best way to pay the least amount of tax.
Doing full financial planning is sometimes an added benefit you get when investing with a independent investment advisor, however, not all the time.
Ask a lot of questions and get a LOT of answers. (I think I said that every week for the last 6 weeks of this investment series.)
And when you are worried about fees, just remember when looking at various investment options:
Returns in Canada are posted net of fees (or at a least they are supposed to be! Read the fine print).
Did you know that?
Price and fees are only ever a consideration without value being there.
Hey, I like my nice purse and car and pay for that service and better quality product and I LOVE IT! (Be careful when being “cheap” to note if that is a scarcity/lack issue and thoughts that there is not enough money or if it is in fact something you don’t value at this point in time! No wrong answers here, just awareness.)
Your financial professional will make sure you are well diversified, hold your hand when you are scared, force you at times to make the right decision when all you want to do is give up, and be there to encourage you to keep going.
You and your advisor may have to hire new money managers from time to time when circumstantial changes happen, or when unsystematic risk (risk that can be reduced through diversification) is not dealt with. When systematic risk occurs (this is the risk that you can’t diversify your way out of, the unpredictable events that effect everything, such as a huge earthquake, virus, or war or terrorism), then it’s not time for a manager change. It’s just bad luck for everyone left holding the bag at that point and best to wait it out if you can.
This too shall pass.
And if you’ve been following me for any length of time you know that I always talk about and believe that humanity was made for increase, so that includes the stock market and it will eventually go up and surpass it’s previous high.
It will. It can’t not.
Humanity will fight. We aren’t about to just shrivel up and die. We will always increase, create, procreate, etc. That’s all part of the divine plan.
Anything past that you can’t control anyways, so, don’t let it worry you!
What you can do today is what you can do to….
Live Your Legacy!
xx Lisa
