After dinner in a Chinese restaurant this week, I cracked open a fortune cookie which read – “Have you prepared for your worry free retirement with more money than you’ll ever need?” Ok, it didn’t actually
say that. It said – “May you live in interesting times!”
When it comes to personal finance we are certainly living in interesting times. Global tariff threats, rising interest rates (or not
depending on the day…), global governments stumbling from crisis
to crisis and you cannot pick up a daily newspaper without a headline screaming “Impending Market Crash”, “Economic Armageddon” and “Are You Ready For What’s Coming Next?” Don’t panic
– the experts don’t know either. The flip side is that the global stock
markets have been on a three year run and continue to remain near
market highs around the globe. What is really going on?
Turbulent economic times are difficult for investors, but a prime
opportunity to re-examine our personal financial plans. Our problem? Many of us spend so much time focused on the rest of our
lives that we overlook the very important role of being director of
our own finances. Given that we continue to feel some degree of
anxiety opening our investment statements, the biggest question we
face is best phrased in Latin – “Quo Vadis”. The phrase means
“Where are you going?” and it is a good question to ask in times of
But it isn’t just personal – it’s also professional. With the merger of
the Private Capital Markets Association (PCMA) and the National
Exempt Market Association (NEMA) the opportunity for synergy
in the private capital and exempt markets will lead to new opportunities for clients across Canada. It isn’t just the clients receiving
new opportunities, but there will be new opportunities for financial
professionals as well.
Current estimates are that less than 40% of all Boomers (many
readers of this article…) currently use a financial advisor? Seriously? Yet many of these same boomers have a personal trainer at
the gym, a coach to help them with their golf swing, or see the value
in providing tutors for their children. What stops people from seeking guidance with their financial future?
Money is still a very emotional issue for many Canadians – even
in 2018. My work in speaking to financial professionals across
North America and for their clients confirms this. We all feel that
we should be doing better. We all compare ourselves to others
which is self-defeating (and always leaves us feeling as though we
are lacking somehow…) and many of us feel inadequate about our
We need to understand that our personal financial future includes
much more than just money in terms of bank accounts, mutual
funds, RRSPs, RESPs and TFSAs,. Our use of exempt market
opportunities, wise use of credit, the protection of insurance, a will
and powers of attorney (personal care and finance), a detailed writ-
ten financial plan, are part of having a comprehensive financial
gameplan for our future and for our families.
Given the potential complexity involved in combining all of these
different aspects of personal finance - how is it that close to 60% of
Canadian Baby Boomers don’t see the need to consult a financial
professional? Often when Canadians are surveyed about their
ambivalence to using financial professionals it comes down to cost.
Financial professionals can earn compensation from fees billed to
you or from commissions from products sold to you. Some feel
there is an advantage to ‘fee only’ because there is no pressure to
sell you anything. Fees can range from an hourly rate for work done,
a flat fee to create an individual financial plan, or a fee based on the
percentage of assets managed. Fee-only planners may not have any
direct motivation (i.e.: commissions) to help you implement the
plan. Having a plan and not implementing it is equivalent to having
no plan at all. Only focusing on cost or commissions, rather than
value may lead you to short-change yourself. A more important
measure should be how your plan functions and whether or not you
are achieving the benefits/results you set out to achieve.
Working with a financial professional can be a scary thought for
many people. To build a complete and comprehensive plan, an
advisor has to become familiar with your entire financial situation.
You have to be comfortable and willing to share personal information with them. They have to understand your dreams and goals.
Sharing personal information with a ‘stranger’ can be scary. Don’t
be intimidated. Financial professionals aren’t there to pass judgment, and they can help you attain the goals you want for yourself
and your family. Keep in mind they don’t do it for you. You are
responsible for your part in the planning process; nobody will care
more about your money than you will.
Are we living in “interesting times”? Absolutely. Feel free to ignore
the headlines, seek the advice you need - your financial future
awaits – the clock is ticking.
Robert M. Gignac
Robert Gignac is the owner of “Rich is a State
of Mind” providing keynote presentations,
client seminars and workshops on personal
financial development and motivation. He is
the author of the Canadian best seller “Rich is
a State of Mind” (18th printing), the voice of
the “Money, Motivation & More” podcast
Copyright 2018 – Robert Gignac & Rich is a State of Mind