Tanya Wilson, a Kelowna-based financial advisor with Raymond James Ltd., says clients are less likely to make emotional mistakes when they can see the long-term plan, and know they’ve planned for all contingencies.

When planning for your future, DIY isn’t always the best idea

What’s the value of good advice?

When it comes to your investments, it could be worth your retirement.

Over the years, various “do-it-yourself” firms have suggested people can retire significantly wealthier if they remove the cost of their advisor. Based on two hypothetical investment portfolios with the same rates of return, it considers the difference in growth, with one paying an advisor – typically about 1 per cent – and one not.

Here’s why that argument doesn’t hold up.

What’s omitted from this analysis is the considerable value advisor offers the client.

“We take time to really know our clients – their unique goals, circumstances and personality. We spend a lot of time on financial planning, tax and estate planning, and behavioural coaching – sometimes being a sounding board and other times a voice of reason to clients and their families,” says Tanya Wilson, a Kelowna-based financial advisor with Raymond James.

“We also strategize with clients’ accountants and lawyers, help business owners build succession plans for retirement and conduct family meetings where my clients’ executors and beneficiaries can learn more about their duties and realities.”

The real value of qualified advice

“When markets are going well, low-cost options sounds great. But what happens when markets turn downward and volatility comes into the picture?” Wilson asks.

In late March, with COVID news drastically affecting markets, many DIY investors faced crashing investing websites and long call centre waits. “People desperate about their life savings were scared, with no one to talk to, and were desperate for that human advice. Decisions made during times of fear can seriously impact long-term financial success.”

Independent studies from sources like Morningstar and Vanguard have quantified the value of investment advice at between 1.5 and 3 per cent per year, delivered through strategies including asset allocation, rebalancing, behavioural coaching, tax and estate planning and financial planning. In markets like what we’ve seen in 2020, the value is estimated at closer to 5 per cent.

“With so much news and information coming at investors, I help clients navigate this and concentrate on what’s important,” Wilson says. “My clients have enjoyed considerable peace of mind through this market correction knowing my team is here. I’m very proud of and how well my clients have dealt with one of the scariest market crashes we’ve seen in our lifetimes.”

RELATED READING: Why emotions and investing don’t mix

For Wilson, an investment strategy is based on a personalized financial plan – a roadmap for our behaviour.

“My clients are less likely to make emotional mistakes when they can see the long-term plan, and know we’ve planned for all contingencies. This financial plan helps my clients avoid being lured off course.”

Professional advice can also help tilt a portfolio to become more tactical based on market events. Adding more exposure at certain times in the market cycle and removing exposure at other times can help increase chances of success.

Finally, Wilson and her team also work hard to help clients minimize the taxes they pay. “No different than working with an accountant, the direct tax savings are often significant and more than offset the cost of that advice,” Wilson says.

“All in all, I believe the biggest risk to an investor’s long term financial well-being is the threat of outliving their money. A financial coach to help stay on track and reduce this threat is well worth the small cost of that advice.”

To learn more about planning for your financial future, fill out the raymondjames.ca/tanyawilson/contact-us.aspx or call 250-869-2447.

RELATED READING: Why a comprehensive financial plan is vital in volatile times

Tanya Wilson is a financial advisor with Raymond James Ltd. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed. The view and opinions contained in the article are those of the author, not Raymond James Ltd. Raymond James Ltd. member of Canadian Investor Protection Fund.

Financial planning

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