01 May How advisors help in choppy markets
You’ve likely heard the term “financial planning” before. But survey after survey tell us that many Canadians don’t actually have financial plans.
You may wonder if a financial plan is something you can create yourself, perhaps using an online investing program. DIY is always possible, but studies have shown there’s value in having a financial advisor to guide you—especially when markets are as bumpy as they’ve been this year.
“The advisor role starts before [clients] even contemplate a financial plan,” says Susan Latremoille, wealth advisor and director of wealth management at the Latremoille Group, Richardson GMP in Toronto. “The client might not even be aware they need a financial plan. Many aren’t—they just have questions about money and their lives.”
Monique Madan, principal at Monique Madan Consulting in Toronto, describes her typical clients as good earners with decisions to make. “They can’t necessarily afford to do everything,” she says, from aggressively paying down mortgages to maximizing registered accounts.
Though she’s confident the financial planning process will provide insight required for clients to make decisions, she’s also sensitive to clients being overwhelmed. “Because they earn well, they’re inundated with solicitation,” she says of her clients.
She favourably juxtaposes herself with the herd by telling clients up front that she won’t impose on them; rather, her door is open when they need her.
Latremoille tells clients that the financial planning process will provide answers to the questions they have, as well as provide insight to identify needs, goals and aspirations.
Asking the right questions
Many financial decisions don’t necessarily have a right or wrong answer, says Ron Fox, CEO at Glidepath Portfolio Services in Toronto. Instead, the right answer comes from understanding a client’s values. When values inform the financial plan, it’s easier to follow that plan, he explains.
Qualitative characteristics, such as motivations and attitude toward debt, are just as important as quantitative ones, he adds.
Likewise, Latremoille says, “The quality of the plan is all about the conversation, and not just about the numbers.” Understanding a client’s values helps with legacy planning, for example, she says.
Madan asks for clients’ raw data in advance so that she can let clients speak freely and address whatever issues are important to them. “It’s a lot of listening,” she says.
Latremoille says she guides clients through a conversation about goals, obstacles and opportunities. For clients who have a spouse, this process often highlights the differences between them, she says.
Madan finds a way to make both spouses comfortable with decisions. For example, she describes a couple in which one spouse invests relatively aggressively, to the other’s consternation. She puts each spouse’s feelings in context, verbalizing how each feels. She then makes suggestions to bridge the gap, such as implementing a stop-loss rule. It’s about making both feel better, she says.
To read the rest of this article by Advisor to Client, CLICK HERE. As always if you have questions be sure to contact Harry Perler or David Olejnik.