November is Financial Literacy Month. We are pleased to welcome guest blogger Randy McCord, instructor of MRU’s Investing in Real Estate course, to share his expertise on the importance financial planning.
How do you measure the value of advice? It’s one of life’s intangibles, but most of us seek it out before making important decisions. The best advice is meaningful and impactful, and as unique as the person receiving it.
And while some people think they can manage on their own and are satisfied with the results, they may not even be aware of the opportunities they’re missing. This is particularly true when it comes to financial security planning, where good advice can be worth its weight in gold.
That’s because receiving independent financial security advice is not just about having access to a wide variety of financial products. It’s about developing a relationship with a financial expert who will take the time to understand your financial situation, work with you to develop a plan to achieve your goals, and help you stay on track despite life’s twists and turns.
Many independent studies confirm that financial security advice gives you – the investor – a greater chance of:
- Increasing your savings by maintaining a disciplined approach
- Being better prepared for a comfortable retirement
- Selecting the most tax-efficient investment strategies for all stages of your life
- Successfully navigating unexpected financial or personal challenges
And despite what many people think, you do not need to be wealthy or established in your career to benefit. In fact, it’s never too soon, or too late, to work with an advisor. Some might even say you can’t afford not to.
Let’s look at some stats that back up these claims:
With Advice/Plan Without Advice/Plan
Annual Savings Rate 86% 43%
Have RRSPs 84% 36%
Have TFSAs 45% 20%
Feel they are better equipped for:
Financial Emergencies 60% 28%
Tough Economic Times 65% 36%
Ensuring Loved Ones are Looked After 73% 41%
Feel they are on Track Financially 81% 44%
Take Annual Vacations 74% 44%
Live the Life they Want 61% 31%
Splurge 65% 31%
Are on Track for Retirement 50% 22%
As you can see, the value of financial security advice in these surveys is pretty conclusive. And although these surveys did not separate independent advice from proprietary advice (i.e,. a bank or investment company selling their own products) the advantages are still striking.
Most independent financial advisors are happy to provide complimentary reviews so it costs the investor nothing for a discovery meeting to see if there is a need and a fit with an advisor. Our advice is to seek out truly independent advisors who act as a broker for all the various products and services available. And interviewing a few different advisors only makes sense, just like shopping for a good lawyer or accountant. Make sure you and the advisor feel comfortable with each other before fully engaging their services.
There is value in planning and getting advice to assist in developing and maintaining your personal financial plan.
— by Randy McCord, Executive Business Director, National Best Financial Network
- The Financial Standards Planning Council
- The Investment Funds Institute of Canada
- Research Surveys of General Canadian Population (outside of Quebec)
- New Evidence of the Value of Financial Advice 2012
- The Value of Financial Advice Report 2013
You can learn more about financial planning with MRU’s Personal and Professional Financial Planning courses.