For Canadians, the fallout from COVID-19 has many re-evaluating their financial priorities. A recent survey1 showed that 8 in 10 Canadians were rethinking them. Since the pandemic began, the survey found that many were questioning if their retirement savings will allow them to live the life they’ve planned in their work-free years, or if they need to do more to bulk up their savings. Others are concerned about the stability of their income and their short-term cash flows.
Ensuring their investments withstand market volatility
Staying on top of their financial situation
Receiving timely financial information and education
A valuable advisor doesn’t just provide investment advice; they share wisdom. That’s because an advisor takes the time to gather intimate knowledge about the primary client, understand their personal preferences, recognize their fears or hopes, and gain knowledge about that client’s heirs before they provide any advice. This is where the true value of an advisor emerges.
An advisor takes the time to gather intimate knowledge about the primary client and their heirs before they provide any advice.
An advisor looks to first understand the immediate financial needs of their clients, as well as their long -term retirement goals to ensure they can live the life they’ll enjoy.
An advisor looks to their client’s future for opportunities to manage risk, save on tax or plan for an inheritance for heirs.
As people move through life, their situations change – often becoming more complex as assets are accumulated and families grow. Plans change too, and they’re not something you can “set and forget” as the pandemic has shown us. An advisor can help you adjust your plans as your circumstances change.
Events beyond our control, such as a job loss, cancelled wedding, changes in lending rates, a sudden windfall, or a death in the family, can have a direct impact, either positive or negative, on a person’s finances, too.
When asked about the most important moments in life where financial advice can be valuable, repondents said:
When approaching retirement
When receiving an inheritance or windfall
When you begin earning
Good advisors help investors stick to their plans when market volatility makes them waver.
The events that affect one’s financial priorities happen from the time a person starts making money to the time they’re drawing down their savings. Financial advice is needed any time that money is in motion.
Google is great for background research and podcasts work well for one-way conversations. But 81 per cent of people polled said they preferred to deal with real live financial advisors rather than doing it themselves. Formula-based computer programs tend to funnel people into investments based on their answers to a set of 10 to 12 standard questions. Human advisors, on the other hand, have the ability to ask dozens of questions to really understand their clients and ensure their financial needs are addressed holistically, from every angle.
Indeed, humans “go deeper” because they can engage in a two-way dialogue. After asking a client when they want to retire, for example, advisors go deeper by asking them to think of people whose retirement lifestyle they admire and those whose retirement they don’t. This, and other relevant information, gives an advisor greater insight into their client’s aspirations and how to fund a fulfilling retirement.
When it comes to which resources people turn to for learning about finances, respondents said:
Prefer consulting with a financial advisor
Books and online resources
Consult with family
The oldest group surveyed, those over 70 years, indicated they were most likely to seek advice from a financial advisor. Not surprisingly, the youngest cohort was most likely to seek advice from family members, books and online sources, such as blogs, social media posts, YouTube videos, and traditional news sources.
There are differences in the behaviour of people who are just starting out in their careers and ramping up their savings versus those who are beginning to draw down on their investments, after a lifetime of work and life experience. It’s natural for people of different ages to want to do things differently, but that can sometimes cause friction in a family.Learn 6 Simple Steps to Preparing Your Inheritors
The people closest to you share a lot of your interests and want what’s best for you. Find out whether they have a trusted financial advisor, why they like her or him, and whether they think their financial advisor might be right for you.
Set up meetings with at least three candidates. Remember, you’ll likely be working with this person for several years or more, so you want to ensure a good match.
To narrow down your candidates, find what credentials they hold. Financial advisors can be accredited as Certified Financial Planners and they can hold other designations as well. If you don’t know what a designation stands for or means, just ask.
When meeting with potential financial advisors, make sure they’re listening to you more than they are talking to you. You don’t want to hear a standard speech. You do want to hear that they’re taking the time to understand who you are and what you need.
Your chosen financial advisor should know your financial history and your future goals. Just knowing your current investible assets isn’t enough to help craft a complete financial plan.
If your advisor talks about financial products in your first meeting, you should question their intentions. First meetings are about exploring and making big-picture plans. Financial products are just one small piece of the puzzle and should be decided on only after a plan is created.