A financial plan is a road map to achieving your financial goals.

We all have financial goals. It could be for a vacation, purchasing a home, children’s education, or retirement.

A financial plan looks at where you are at present and what you want to achieve in the future. It looks at net worth, cash flow, insurance planning, estate planning, retirement planning, and taxes.

A financial plan gets you in touch with reality, helps you to become realistic, looks at opportunities and risks, and gives you peace of mind.

Scott Schofield of Nesbitt Burns talks about reasons to have a financial plan and a disciplined savings strategy. Having this does not make you feel guilty.

Scott tell my global audience a little about you?

I am an investment advisor in London, Ontario, for approximately 150 families and business owners. I am a Chartered Investment Manager (CIM®) and have 20 years of experience in the asset management industry. Before joining BMO Nesbitt Burns, I consulted with financial advisors in my role as Senior Vice President with Mackenzie Investments and Dynamic Funds and hold a BA in Economics from Dalhousie University.

When not analyzing numbers, I enjoy many outdoor activities including kayaking and stand-up paddleboarding. My favorite activity is skiing with my wife and our two daughters that are 8 and 10 years old.

You have been around the financial services industry for a long time. What are some of the things you have learned? 

Being in the financial services industry has taught me a number of things over the years. However, one thing that stands out is that investors have a tendency to forget about ‘risk’ in their portfolios when the markets are good. It is always good to re-valuate your portfolio to ensure your portfolios are aligned with your objectives. If you are asking yourself, what are my objectives? you should seek advice from a licensed professional immediately.

Besides saving 10 percent, paying off your debts, living within your means what other advice can you give to my audience?

Great question, I would have to say seek out advice. Many Canadians feel like they do not have a high enough net worth to seek the advice of a professional. This is not the case. The value of having a financial advisor is undeniable.

Why is it important to save for retirement and what are some of the tools? 

There will come a day when you stop receiving a paycheque and need to replace that with an income from your portfolio. Saving in tax-deferred plans such as Registered Retirement Savings Plan’s (RRSP’s) and Tax-Free Saving Account’s (TFSA’s) are great ways to help reduce and manage the level of tax you will pay in retirement.

To become successful in saving, we have to make some sacrifices and have a financial plan. Do I always have to have the latest TV, cell phone, latest car? 

Some people really like to have the latest and greatest. I do! You should treat yourself from time to time. Having a financial plan and a disciplined saving strategy can potentially take the guilt out of treating yourself because you will know if you can or cannot afford these things.

Talk to me about TFSA and RESP? 

Both are great tools for investors.

The Tax-Free Savings Account (TFSA) began in 2009 and is a great way for Canadians to set aside money tax-free throughout their lifetime. A TFSA does not apply taxes on any contributions, dividends, capital gains, or interest earned, and can be withdrawn tax-free. This savings account is available to individuals aged 18 and older and can be used for any purpose.

An RESP is a great way to save for your child’s or grandchild’s post-secondary education. Parents, grandparents, and friends can contribute money any time to an RESP – up to a lifetime total of $50,000 per child. These contributions are not tax-deductible, but any investment income that’s earned within the plan isn’t taxed until it’s withdrawn.

The federal government will match 20% of the first $2,500 you contribute each year. That is $500 each year. When your children or grandchildren are eligible to start receiving the money to pay for tuition, books, computers, residence, meal plans, transportation and more, they pay the tax—generally at a much lower rate than you would have paid.

If my viewers want to become a client of yours, what are you looking for in a client? 

The bottom line is we want to work with clients that are engaged in their financial well-being.

Working towards financial goals is best done by a collaboration between our clients and our team.

It does take some investment of time in the early stages to get to know our client so we can properly propose personalized solutions and a financial plan that finds a balance between their goals and their risk tolerance. From there we implement the plan and monitor it year-round.

How important is it to have a financial plan, a road map of where you are going, goals, estate plan, and a will? 

I cannot stress enough how important a financial plan is to our client’s financial well-being.

It is a personalized blueprint or roadmap to meeting and exceeding financial goals.

A plan is adjusted over time as life events and unexpected things happen in our clients’ lives.

It also is a tremendous aid in helping to minimize tax during and after our clients’ lives.

How important is food to you and let us know some of your favorite restaurants in London?

What can I say I love food! I always like to be the first of my friends to try new restaurants and enjoy traveling and trying new to me restaurants along the way.

In London, I tend to frequent two of my favorites often.

The Church Key Bistro-Pub is a British traditional gastropub specializing in traditional food done with a gourmet flair. They use seasonal and locally sourced ingredients whenever possible. If you go there you have to try their Ale & Onion Soup with the Smoked Salmon Sammy.

The Bungalow – Neighbourhood Hub, is a great neighborhood ‘local’ in a residential area. The restaurant’s style and cuisine are designed for casual and convivial enjoyment. They have an extensive craft beer selection and a build your own burger option that they claim results in over 3000 different possible combinations. When not tinkering with my burger recipe of choice, my go-to is the Fish Tacos with the Habanero Potato Cheddar Bacon Soup.

How do you balance faith food family and finance in the 21st century? 

Finding a balance is sometimes tough with a busy practice and family. Making and taking the time to shut off devices and being in the moment with my family is very important to me. The best conversations are with my girls walking the dog after dinner or the quiet time when riding the chair lift when skiing the family.

The post Reasons To Have a Financial Plan and a Disciplined Saving Strategy appeared first on Four Columns of a Balanced Life.

Financial Advisor, Financial Consultant, Financial Planner, Wealth Advisor, or a Peddler

In 2019, just before COVID hit, I was attending a financial seminar in a mall. The first booth had a bunch of firemen who worked three days on, three days off, and were selling mutual funds on the side. The next booth was nicely laid out with brochures. The lady was a nanny from 7 am to 3 pm, and selling mutual funds was a side hustle. At the third booth was a salesperson who called himself a financial advisor and tried to hire me. He said I could hire other people and make money. Everyone was a mutual fund peddler.

As I walked away from the so-called financial seminar, something hit me. The average public really does not know who or what a financial advisor is. As a financial advisor, I had an MBA, a financial planning designation, a trust, and a portfolio manager designation, and how does the public know the difference? Do they even know what a financial advisor, financial consultant, or financial planners does?

Everyone is unique and has a different approach towards money. Financial advisors are different, too. It can become challenging to find the right advisor for you to meet your goals, needs, and align with your values. It is important to find the exact match who will manage your money healthily and ethically. Money can be used to make you happier and make a difference. If you are aware of your goals, priorities, and values, then finding the right advisor will make a huge difference.

A financial advisor is more than doing an exam and using the software. It is important for the advisor to be a good listener, have empathy, and guide you through the various financial decisions you will be making during your life. It is a long-term relationship.

Before you look for a financial advisor, I have compiled a few questions to ask, to see if it is the right fit for you. After all, you are giving them your money and savings.

Do not be nervous about interviewing an advisor. You are looking for a ‘cultural fit’. Tell the advisor the first meeting is a ‘getting to know each other’. You will not make a decision in the first meeting. You are hiring someone to take care of your money. The advisor needs to provide a path and not confuse you.

The first thing you need to do is ask yourself what kind of help are you looking for? If you are just starting out and want to invest anywhere from $50 to $500 a month then a robo-advisor will be a great fit for you. Robo-advisors have low fees and do not have a minimum threshold.

Will you have a fiduciary duty towards me?

A fiduciary put their clients’ interest ahead of their own, focusing on preserving good faith and trust. A fiduciary is legally and ethically bound to act in your interest. A non-fiduciary is focusing more on ‘products’ that are ‘suitable’ for you and might not be the best for you.

Talk to me about your education and qualification?

Do not get confused by the alphabet soup of initials behind the name of the financial advisor. The titles of a financial planner, investment advisor, investment executive can be confusing. Look into their background by seeing the professional designation database and the regulatory authority’s website. Check how long they have been in the business and if there are any disciplinary actions, lawsuits against them, or if they are under supervision. A CFP, CFA, or CIM designation is ideal.

You want your advisor to have an understanding of your estate plan, tax plan, insurance and bring a holistic approach to personal finance.

What is your investment philosophy?

The investment advisor is your coach, your guide, and will be an integral part of your financial planning. It is critical to be familiar with the approach they take regarding your investments. What is their approach? What kind of research they do? How do they choose specific stocks, bonds, ETF’s and other investments in your account? Do they strictly buy mutual funds and leave them there? Are they active or passive investors? Will they rebalance your account?

As a client, you have to be on the same page as your advisor. Any advisor will do well in a bull market when everything is going up. How about in a choppy market? The reason it is important to be aligned with your advisor is that what if you do not want to invest in sin stocks? You do not want to invest in an arms manufacturer, alcohol, cigarettes, or gambling companies? However, the advisor presents a portfolio that is full of these companies. Or, you want to invest in companies that focus on corporate social responsibility, ethical and sustainable ideas, invest in women and members of the BIPOC and LGBTQ community.

Investments need to be aligned with your goals and values. It should be diversified. They should have a benchmark that they want to beat. The portfolio recommendations should look at your risk tolerance, investment objectives, cash flow needs, estate goals, age, net worth, and tax situation.

How do you get compensated?

Advisors use per transaction, fee-based or they put you in DSC funds where they get a commission upfront but you have to hold the funds for a certain period. I strongly recommend a fee-based advisor. The fee-based advisor charges a percentage on the assets they manage. They also are not product sellers that give them the greatest commission.

Make sure the advisor is not double-dipping. Make sure the advisor is not charging you fees, then putting you into new issues, private placements, or mutual funds where they get a commission. The advisor should put your needs, goals, values, and investment objectives first.

What experience do you have?

It is vital that you choose a professional who has the experience and who devotes all their time to advice. You want to know how long the advisor has been in the business, how many firms have they changed, and what kind of clients they focus on.

Which custodian do you use?

You do not want a Bernie Madoff happening to you. The advisor needs to have an independent custodian to hold your assets. You want to have online access so you can check your assets.

What services are offered?

A financial advisor might offer financial planning, estate planning, life insurance, stocks, bonds, mutual funds, options, or tax advice depending on their education, credentials, areas of expertise, and registration with regulatory authorities.

I prefer someone who looks at my financial goals, ethics, values and aligns them with investments, insurance, estate planning, and taxation.

Explain how the relationship works between you and your team?

You want to know; will you be talking to the advisor or the assistant. Also, how often will you meet during the year to discuss how the investments are performing. Is it an annual face-to-face meeting? Will you get a weekly or monthly email? Who else is on the team? Is there a lawyer, accountant, or estate specialist also on the team?

Do you work with a special type of client?

Some advisors work only with entrepreneurs, doctors, professional sports players, insiders, executives, or women. You want to know if you fit in that mold? You want to find an advisor who is passionate about helping you meet your goals and has experience working with someone in your financial situation.

Is there a minimum amount that you work with?

You need to find an advisor who will work with what you have. Advisors have a minimum investment for them to take an account. No use going to see an advisor who only takes a million and you have only a hundred thousand to invest.

Does the New Client Application Form detail all the services that will be provided?

The New Client Application Form takes all your information down. Find out if all the services are outlined. Read the fine print.

The next steps in hiring a financial advisor

You have interviewed three advisors. Now it is time to make your decision. Did you like the advisor? Did you bond with the advisor? Can you trust this person? Was there a comfort level? Was the advisor listening to you or just talking over you? If there is a yes to the answers then go ahead and make an appointment. Good luck.

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