I think to truly protect your long-term financial well-being, Canadian investors must go beyond short-term controls and recognize the value of planners, especially in retirement plans.
Do it yourself: Is it better?
Many Canadian DIY investors are proud to be able to manage their portfolios, and they believe lower account costs and direct control mean better results. However, in reality, DIYERS may ignore key risk factors:
- Make decisions based on emotions,
- Their portfolio lacks diversification and
- Failed to adapt asset allocation to a complex and evolving economy.
Volatile markets, like what happens now in the cheap Canadian dollar and the U.S. trade war, mean that decisions can become stressful and emotional, which can often cover long-term planning strategies for those who manage their own investments. With inflation, policy shifts and geopolitical tensions, these times require many experiences and visions that DIYERS does not have.
I often receive requests from Canadians to check out their DIY plans. But my advice is always the same: There is no disciplined attitude of independent financial planners, which is too easy, especially when managing the retirement transition. Giving up some control and working with a qualified financial planner is not a sign of weakness. This is a strategic decision to help ensure your retirement year doesn’t happen by chance.
Find a qualified financial advisor near you
Search our directory of qualification consultants that offer financial and investment services in Canada.
Can you save money to manage your investment?
Another common misconception among DIY investors is that self-management eliminates unnecessary expenses. While it is true that investment products such as mutual funds and exchange trade funds (ETFs) may have relatively low costs, there are still fees. Some are visible, some are hidden. For example, mutual funds typically have an administrative expense ratio (MERS) of 1% to 2.5%, while ETFs may offer 0.05% to 0.75% MERS, but they also include hidden costs such as Bid-sask spreads, Forex fees, Forex fees and poor time transactions.
But, unfortunately, all costs are also the biggest: missed opportunities. Without professional guidance, many DIY investors in Canada cannot support sustainability, maximize tax efficiency and work long-term.
A good independent financial planner can work with a portfolio manager to create a custom, cost-effective portfolio and work together toward clients’ post-retirement goals. They can tailor strategies to their individual life stages, goals and risk tolerance. This is not always related to short-term market trends. In many cases, hiring a financial planner can be much less expensive than what an investor has already paid. I witnessed it with my own eyes.
What exactly did the planner do
Qualified consultants do more than just purchasing stocks; they provide wealth management. We take a nuanced approach to planning ways to align assets directly with life goals – most importantly your retirement strategy.
