Why use a fee-only planner ?
You have probably read many articles in newspapers and online, emphasizing the benefits of choosing a fee-only planner (and who am I to argue!!) but, to be quite honest, a lot of people do pretty well in managing their own finances. So why should you go out of your way to pay money for something which is pretty straightforward?
Let me share with you the analogy of our recent kitchen renovation. As we are pretty handy and frugal, my wife and I were able to remove the old kitchen (the Habitat Restore was grateful!) and could have done a lot more by reading tips in books or online for some of the electrical or plumbing work. Thankfully I remembered the last time I had done plumbing work and stopped immediately! It didn't take us long to realize that calling in the experts would save us time and money in the long run.
So for a higher upfront cost we gained peace of mind and expertise; experts who were qualified to do the job. Similarly with a fee-only planner you get expertise and long-term comfort from your initial investment.
Here are some of the concerns our clients had and how we were able to help:-
- "We are OK financially but are too busy to sit down and plan for our future. We have been able to save but we don't know if our priority should be to save for the kids' education or retirement". Hammond Financial summarized their financial goals, analysed their existing RRSP portfolio, created a written personal statement of investment policies and developed a plan to achieve this.
- "We never seem to get ahead. There is always something unexpected like a car repair or a furnace repair .... both happened to us in the same month!" We adopted a similar approach to the client above but in addition we added a summary of income and expenses and suggestions as to where savings could be found.
- "I just contribute to my RRSP to get the tax refund but feel I should be doing more than that". We analyzed their RRSP portfolio, assessed the client's risk tolerance and investing horizon and developed a comprehensive long-term retirement plan.
- "How much do we need to retire comfortably?" This is probably the most common question we are asked and the most personal to answer. The solution depends (fundamentally) on what lifestyle you want in retirement and how much you can save between now and then.
Given the recent fluctuations in the financial markets worldwide, there is extra benefit from using a fee-only planner and, based on our experience, we offer five suggestions to ensure peace of mind.
1 Focus on why. Why are you saving, what are your goals? This perhaps is very obvious but, for example, with the recent wildly oscillating global stock markets, it pays to remember your long-term goals. 'Investing by newspaper headline' is NOT a good way to plan your future.
2 Write down your plan or goals. Again sounds simple but this is such a powerful tool !
3 Educate yourself. Your planner is there to help you but the more you know about financial matters, the better your outcome will be! I personally recommend Canadian MoneySense magazine as a great, reasonably priced, resource.
4 Reward yourself. Unless you are the type of person who can live on Kraft dinner in a bare room so that you can retire early with enormous savings, I suggest you reward yourself (modestly, of course!) when certain financial goals are attained.
5 Have a regular check up with your planner. This does not have to be every year but base this on a time frame that suits you.
So, a fee-only planner has many advantages for you. Please consider Hammond Financial when you are making the decision to secure your future.
Andy and Lisa both hope you will find these tips, hints and general advice interesting