A great financial planner is worth the money. This person will listen to your goals, respect your priorities, assess your current financial situation, and create a roadmap for your money. Most importantly, this person will not try to sell you a product where they get paid for doing so.
If you remember nothing else from this post, remember this.
WHEN SOMEONE ELSE PAYS YOUR FINANCIAL ADVISOR TO RECOMMEND THEIR PRODUCT, THEN THE FINANCIAL ADVISOR WORKS FOR THEM AND NOT FOR YOU.
Blue Lobster
The key to ensuring that the financial advisor is working for you is for you to pay a fee for their advice. When you pay them directly, then you don’t have to worry that their interest in getting paid is in conflict with your best interest of getting proper financial advice for your circumstances.
I’d been investing on my own for about 20 years before I ever saw a fee-only financial planner My choices had put me in a good position, but I would’ve done better had I received the advisor’s advice sooner. For one thing, I wouldn’t have made the rookie mistake of investing solely in dividends for 2 solid decades. I would have learned how to better diversify my investments, a very important component of building a solid portfolio. There was also my little problem of procrastinating for too long before I started funding my investment account in earnest. In short, a fee-only financial planner would have explained how and why my mistakes were undermining my goal of having a nice, fat cash cushion upon which to retire.
The free foundational advice that’s available online is satisfactory. Truth be told, you won’t go terribly wrong with it if you follow the general maxims that are everywhere:
- Spend less than you earn.
- Pay yourself first.
- Build an emergency fund.
- Get out of debt.
- Invest for long-term growth.
- Max your TFSA and RRSP contributions.
These generic rules are fantastic for nearly 95% of the population. You will be financially secure if you follow all of them. Of that I have no doubt.
If you’re in that 5% of people for whom these rules aren’t as good, you need to find out sooner rather than later. A financial planner will help you craft a personalized money plan to help you reach your goals.
Further, there are some nuances to these rules that aren’t immediately obvious. It’s the financial planner’s job to be aware of these nuances and to explain them to you. This is why it’s vitally important that you’re the one paying for the financial planner’s advice. If the planner is being paid by an investment company to sell their product, then you can never be sure that the recommendation is what’s best for you or what’s best for the planner.
For example, you might agree that investing is a good idea, but you need to know how to go about doing so. A fee-only financial planner will give you the answer to the question how exactly does one go about investing for long-term growth???
I’ve been investing in my brokerage account for so long that I forget that not everyone knows what a brokerage account is, much less how to open one. I also forget that not everyone is as enamoured of automatic contributions to investment accounts as I am. If you never open the account and you never set up a way to get the money into the account, then investing for long-term growth is going to be challenging.
Another question is whether it’s better to pay off debts before starting to invest. Further to that, you may be wondering if you should fully fund your TFSA and your RRSP before investing in a non-registered investment account. And if your funds are limited, should you fund your TFSA before you fund your RRSP?
These are the kinds of questions that a financial planner is best-situated to answer. You’re looking for someone who is going to be straight forward about your options and who can create a path for you to follow. A good financial planner explains why steps need to be taken in a certain order. There is clarity about the purpose behind each recommendation. Most importantly, a financial planner will listen to you in order to craft a personalized financial blueprint for your money. As your circumstances change, the financial plan will change too. Your financial planner can help you navigate how those changes impact your financial goals.
Finding a great financial planner isn’t easy. Luckily for you, Moira Vane of MoiraRoseFinancials is ready to help you create a solid plan for your money. Your job is very simple. All you need to do is know what you want your money to accomplish, show up, ask questions, and learn. From that point forward, Moira will explore your current situation and determine the steps you need to take to get to where you want to be financially. Working with Moira will improve your financial trajectory.