The Right Fit.
EVER NOTICE HOW MANY OF LIFE’S BIGGEST GOALS have some financial component? Sure, you can master a foreign language or run a marathon without making a significant financial commitment. But try buying a home, starting a family or helping your kids go to university. Same goes for retiring early or leaving a legacy. Without disciplined planning and saving, these goals can just slip away.
If you’re juggling a job and a busy family life, you probably don’t have time to figure it all out for yourself. Then again, like many Canadians, you may feel you don’t have the expertise to tackle the complexities of your financial affairs alone. That’s when turning to professional advice is a huge advantage. In fact, getting the right person on board can be the decisive factor in helping you meet your goals. Good advice might even help you surpass them. Surprised? According to a recent study, of those surveyed, Canadians with advisors financially outperform those without.
It’s okay to have high expectations
Given the high personal stakes, you should have equally high expectations of your advisor. A solid advisor will do three things:
1. Learn about you. This includes assessing not just your finances, but also your family situation, short- and long-term goals – even your hopes and dreams. Just as important, your advisor will establish your risk profile. Are you the button- down type of investor that avoids risks? Or do you relish the thrill ride of stock markets, with their potential big payoffs? Perhaps, like most of us, you fall somewhere in-between.
2. Build your plan. This is the all important“advice” part. Your advisor should deliver a plan that’s actionable– things you can do immediately. It should also have milestones along the way, so you can gauge your progress. A complete plan will most likely include:
Disciplined savings – amounts to putaside on a regular basis
Investment portfolio – based onyour risk profile, a diversifiedportfolio can help to protect andgrow your money
Debt management – this should bepart of every financial plan
Tax strategy – to help minimizetaxes, of course
Risk management – life, disability and critical illness insurance, to help protect your family
Retirement plan – depending on your age and goals, the plan may include projections of when you can expect to retire, and with how much money.
Adjust your plan.
Life is all about change – often unexpected change.This means your plan should be flexible and subject to a regular review,generally once a year. That’s when you’ll sit down with your advisor to check your progress, revisit your goalsand, if necessary, reset your course.
Not just about retirement
Some Canadians start thinking about talking to an advisor in their 40's or 50's, when retirement first peeks over the horizon. Life-changing events suchas buying a house or having a child can also trigger a financial reckoning and the need for advice. But your goals don’t have to be that large. Saving for a car or a once-in-a-lifetime trip might also be a good reason to start talking to an advisor.
The point is, you call the shots on what you want from your advisor –from helping you plan your estate and create a comprehensive road map to just being a sounding board.
Be prepared, as well, to hold up your end of the relationship with some basic knowledge about the financial world. Start by reading the business section in your paper or following financial experts on social media. You don’t have to be an authority. But the more you know, the more you can be involved in some of the most important decisions in your life.