What91裸聊视频檚 the value of good advice?
When it comes to your investments, it could be worth your retirement.
Over the years, various 91裸聊视频渄o-it-yourself91裸聊视频� firms have suggested people can retire significantly wealthier if they remove the cost of their advisor. Based on two hypothetical investment portfolios with the same rates of return, it considers the difference in growth, with one paying an advisor 91裸聊视频� typically about 1 per cent 91裸聊视频� and one not.
Here91裸聊视频檚 why that argument doesn91裸聊视频檛 hold up.
What91裸聊视频檚 omitted from this analysis is the considerable value advisor offers the client.
91裸聊视频淲e take time to really know our clients 91裸聊视频� their unique goals, circumstances and personality. We spend a lot of time on financial planning, tax and estate planning, and behavioural coaching 91裸聊视频� sometimes being a sounding board and other times a voice of reason to clients and their families,91裸聊视频� says Tanya Wilson, a Kelowna-based financial advisor with Raymond James.
91裸聊视频淲e also strategize with clients91裸聊视频� accountants and lawyers, help business owners build succession plans for retirement and conduct family meetings where my clients91裸聊视频� executors and beneficiaries can learn more about their duties and realities.91裸聊视频�
The real value of qualified advice
91裸聊视频淲hen markets are going well, low-cost options sounds great. But what happens when markets turn downward and volatility comes into the picture?91裸聊视频� Wilson asks.
In late March, with COVID news drastically affecting markets, many DIY investors faced crashing investing websites and long call centre waits. 91裸聊视频淧eople desperate about their life savings were scared, with no one to talk to, and were desperate for that human advice. Decisions made during times of fear can seriously impact long-term financial success.91裸聊视频�
Independent studies from sources like Morningstar and Vanguard have quantified the value of investment advice at between 1.5 and 3 per cent per year, delivered through strategies including asset allocation, rebalancing, behavioural coaching, tax and estate planning and financial planning. In markets like what we91裸聊视频檝e seen in 2020, the value is estimated at closer to 5 per cent.
91裸聊视频淲ith so much news and information coming at investors, I help clients navigate this and concentrate on what91裸聊视频檚 important,91裸聊视频� Wilson says. 91裸聊视频淢y clients have enjoyed considerable peace of mind through this market correction knowing my team is here. I91裸聊视频檓 very proud of and how well my clients have dealt with one of the scariest market crashes we91裸聊视频檝e seen in our lifetimes.91裸聊视频�
RELATED READING: Why emotions and investing don91裸聊视频檛 mix
For Wilson, an investment strategy is based on a personalized financial plan 91裸聊视频� a roadmap for our behaviour.
91裸聊视频淢y clients are less likely to make emotional mistakes when they can see the long-term plan, and know we91裸聊视频檝e planned for all contingencies. This financial plan helps my clients avoid being lured off course.91裸聊视频�
Professional advice can also help tilt a portfolio to become more tactical based on market events. Adding more exposure at certain times in the market cycle and removing exposure at other times can help increase chances of success.
Finally, Wilson and her team also work hard to help clients minimize the taxes they pay. 91裸聊视频淣o different than working with an accountant, the direct tax savings are often significant and more than offset the cost of that advice,91裸聊视频� Wilson says.
91裸聊视频淎ll in all, I believe the biggest risk to an investor91裸聊视频檚 long term financial well-being is the threat of outliving their money. A financial coach to help stay on track and reduce this threat is well worth the small cost of that advice.91裸聊视频�
To learn more about planning for your financial future, fill out the or call
RELATED READING: Why a comprehensive financial plan is vital in volatile times
Tanya Wilson is a financial advisor with Raymond James Ltd. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed. The view and opinions contained in the article are those of the author, not Raymond James Ltd. Raymond James Ltd. member of Canadian Investor Protection Fund.