Do I hire a financial adviser or should I try building out a financial plan myself?
With the rise of apps and low-cost, online investment products, it can feel easier than ever to take a DIY approach to everything from budgeting, to saving, and investing.
But it becomes more challenging when you want to get beyond the basics. For example, how do I know if I’m saving enough? How can I work towards multiple investing goals at one time? Where can I shave down my expenses? When can I retire? How much should I save for my children’s education?
That’s where a financial adviser comes in. Their job is to see the big picture and help you reach your goals.
Financial advisers provide a slew of benefits that apply to all Canadians, regardless of their net worth. In fact, the stakes can be higher if you’re not rolling in the dough.
CI Direct Investing clients get unlimited access to professional, commission-free advice. Here are the top four advantages of working with a financial adviser:
Get a personalized plan that makes sense for you
The internet is a wonderful resource but it is nearly impossible to find advice that is specific to your situation.
Financial advisers will help you build a personalized plan that accounts for various long and short-term goals. Let’s say your dream is to retire with enough money to travel for four months a year. A financial adviser will help you translate this dream into a financial goal, and will help you build a plan to make it a reality—from budgeting, to saving, and investing—while still accounting for the less romantic aspects of your financial needs.
As your life evolves, your plans will change. For example, maybe you thought you wanted to retire in fifteen years, but now you want to do it in ten years. A financial adviser will help you adjust accordingly, while providing a guiding light on the best way to reach your goals.
Save more money
Half of Canadians say they’ve lost sleep due to financial worries. And the things that keep them up at night? Struggling to save money for short and long-term goals, the increasing cost of living, and unexpected expenses.
The financial planning support that advisers provide can help you become a far better saver. Having a written plan that you review with your adviser on a regular basis (let’s say, yearly) will keep you accountable to your goals.
In fact, after five years working with an adviser the average person will typically have 1.5 times the assets of those who don’t. After 15 years, they’re nearly 3 times as wealthy.
Saving money doesn’t have to require radical lifestyle changes. Shaving just 1% off your monthly spending can lead you to be nearly 10% richer down the road. If you’re already saving $1,000 a month, that means adding just $10 in additional savings.
How can such a small change make such a big difference? First, your money can grow substantially over time when invested (the magic of compounding!) and second, getting in the habit of budgeting and saving helps you save even more money in the future.
Avoid costly investment mistakes
You’re bound to see news headlines that would make any investor’s heart beat a little faster, whether it’s the latest would-be “get rich quick” stock (think of how much money was lost in the brink of the bitcoin crash), or a dramatic market swing. In the midst of the Great Recession, many investors leaped to sell off their stocks, and felt the pain of permanent losses.
It can be tempting to react to this kind of news with knee jerk investment decisions—and the consequences can be costly.
At the end of the day, minimizing losses means holding steady to the investment strategy designed for your long term goals. By working with an adviser, you’ll have the insight of a trusted expert who’s there to guide you through the highs and lows. In fact, those who work with financial advisers are over 150% more likely to stick to their long-term strategy.
Feel confident and in control
Four out of five Canadians don’t feel confident about their finances.
Technology has given us so much more power to manage our day-to-day finances, but it doesn’t make up for the value of personalized, human advice. The best solution is to use technology paired with an adviser’s guidance.
Working with a financial adviser gives you the peace of mind that comes with having a plan and trusted advice. You can feel confident that you’re saving and investing the right way to achieve your goals, prepared for an emergency, and making the best decisions for your future.
So, do you need a financial adviser? You can likely get by without one, but you’ll miss out on the benefits of financial planning outlined above. Moreover, you’ll feel more in control with a plan in place, plus you’ll likely save at double or triple the rate of your non-advised friends.
Looking for expert advice?
CI Direct Investing offers unlimited commission-free financial advice to all customers, alongside low-fee investment portfolios. Our Certified Financial Planner professionals are on hand to help you reach your goals. Book a call with us today.