Peter Boys, Boys Financial Services

Case Study: First Client Visit

Computer And Book

When prospective clients approach me for some help with their finances, we go through a discovery process to give me an idea of where they stand.  This discussion usually covers their investments and savings, insurance coverage, spending habits, and their goals and dreams.  There are as many types of initial reviews as there are people, but they are usually enlightening for both parties.  The following scenario describes a recent first client case study.

Take a recent meeting with a young couple from another area. They have one child, are non-smokers, own their home plus a rental townhouse.  They have mortgages and a line of credit with life insurance provided by their bank.  They recently purchased an SUV but declined the life and disability insurance on that loan.  Both have some life insurance, health benefits and savings plans through work.  They have a savings account but had never thought of investing in TFSAs and no-one had suggested it to them. They both said they stay away from impulse purchases and only buy things such as TVs, when they have saved the cash to do so.

Some things that came up during the discussion was that they were not aware that their mortgage insurance paid out on the first death, and that the survivor would no longer have coverage.  They also did not understand that underwriting for their mortgage life coverage is done at the time of a death claim, and the possibility of the claim being denied if they had forgotten or misstated some old health issue.

Their group plans provided short and long term disability coverage but no critical illness coverage.  If either of them changed jobs they would face the need to re-qualify.  At their age, they are at significantly greater risk of suffering a disability or a critical illness prior to age 65 than of dying. They had not thought about what happens to their group life policies if they change jobs, as that coverage is not transportable.  These could be seen as holes in their protection.

We discussed some options that could provide the protection they need with little or no increased cost.  Their current creditor coverage costs around $80 per month.  We compared a personally owned coverage for only $128 a month which could provide the protection they need now and into the future.

Another option that could provide good value is insurance that provides a pool of coverage for life, disability, and critical illness all in one plan.

They were doing a good job of tracking expenses, but were doing it manually using spreadsheets.  I suggested they consider some person finance software that could automate the process, help with budgeting and easily produce reports.

They agreed that they should transfer in the half their savings into TFSAs, and set up an automatic monthly contribution plan.

They have a mortgage coming up for renewal in the summer and I gave them some alternatives to check out to see if there would be any significant cost savings or reduction of the term of the mortgage.

There were many issues covered at this meeting, and I believe they left with a much better understanding of their financial situation, and a starting point to go forward.  They needed to get some more information together such as their wills and tax information.  My homework was to summarize the meeting and sent a copy of that letter to the client for verification.  It may also involve some research to provide some follow up information for the next one meeting.

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