Peter has held the title of a “Financial Coach” since 1997, a term that Mackenzie Financial plugs when advocating the value of financial advice.
Think of your advisor as your financial coach.
To reinforce the impact that a knowledgeable financial coach can have on an individual, Mackenzie Investments also explored the significance that financial advice has on the Canadian household in a self-published survey (2008), supported by an Ipsos Reid survey (2010) on behalf of The Investment Funds Institute of Canada (2010, 2011) which interviewed nearly 10,000 Canadians about investing and financial advice.
IFIC’s current 2012 Value Of Advice report demonstrates that there is a growing body of international evidence supporting the value of financial advice and summarizes a groundbreaking Canadian study from the Centre for Interuniversity Research and Analysis on Organizations (CIRANO) in Montreal, which shows that advice affects the savings potential of individuals positively and significantly.
The report also examined evidence from:
- United States – advised individuals are more likely to adopt a long-term investment strategy those not seeking financial advice
- Australia –financial advice provides significant macroeconomic benefits through the gains from individual and national savings
Corroborating evidence from these diverse sources continues to confirm the role of financial advice in helping individuals reach their long-term financial goals.
While these surveys touch on the influential impact of investment fund advisors, the outcomes clearly show how the overall impact of professional financial advisor services can favorably affect the financial goals of individuals who utilize them.
People who utilize the services of a financial advisor are more confident about their future than those without one.
In a nutshell, the collective results from all the surveys mentioned, reveal the following:
- As people get older, they increasingly turn to financial advisors
- 60% of boomers rate their personal ability in choosing the right investments as fair or poor
- 56% believe they are not saving enough money for retirement
- 60% believe working with an advisor will result in higher investment returns
- Families with a financial advisor had more invested in RRSPs, RRIFs and RESPs than those without an advisor
- 74% who had an advisor felt that they would have enough money to retire on, compared to just 53% who did not have expert advice
- 72% with a financial advisor were satisfied with their current financial situation, compared to 53% without an advisor
- Respondents with an advisor held a greater percentage of stocks or exempt market investments while those without an advisor tended to hold a larger proportion of conservative assets such as GICs
So where is the value of advice? It is in the peace of mind and security that comes from being prepared for the future and making smart financial decisions along the way.
Here’s what a Financial Advisor can do for you:
Your financial advisor’s role is to work with you to develop a comprehensive financial plan, share their experience and knowledge, and keep you informed of relevant opportunities that may arise. To give you an idea of some of the services that a financial advisor can provide, consider the following incomplete list:
- Assess your current situation and coordinate a long-term financial plan
- Identify your risk tolerances
- Evaluate asset allocation
- Ensure that your asset portfolio coincides with risk tolerances
- Income protection (CI & DI)
- Develop tax and insurance strategies
- Investigate practical Life Insurance options
- Prepare for anticipated financial deadlines (eg RRSP contributions, income taxes, GIC maturities, etc.)
- Help implement an efficient budgeting strategy to avoid costly mistakes that could derail your financial goals
- Mortgage (efficient pay-down & property protection)
- Identify & prioritize major (planned?) expenditures
- Introduce unbiased opportunities for income growth
- Recommend other financial service providers
- Retirement planning (establishing a viable income stream)
- Estate planning
- Charitable donations and legacy planning
Think of your financial advisor as a “coach” – someone who can motivate you, keep you focused, instill discipline, and implement a program to help make the most of your current and long-term goals.
To help get you on the right track, take a look at our checklist for working through some questions you want to ask when researching a “financial coach” for yourself,and be sure to visit ADVOCIS’ proposed Professions Model for both advisors and consumers in Canada.
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