Financial Planning for Life

Since the downturn in the economy back in 2008, many people have questioned the value of their financial services advisor. Occasionally, I even questioned myself!

This also raises the question of how does one define “value” when it comes to financial advice?  If value is only defined by the rate of return on your investment, then very little “value” has been added over the last couple of years, unless you just started investing since the market drop.

I have been in this industry for more than 14 years, and I have yet to see anyone in our industry that can accurately predict or anticipate the economy or the markets, year over year over year.  This person may exist, but I have yet to meet them.  Actually I would love to meet them, because all of the world’s financial problems would be instantly fixed!

If you define value by the total basket of products and services that can be accessed through a financial services advisor, then I would argue that “value” has been added in many areas of client’s lives. 

Some examples might be:
 

• Helping you stick to your financial plan no matter what the world is doing
• Reviewing your goals based on the state of the world
• Tracking your progress towards your goals
• Cash flow review
• Debt management review
• Insurance review
• Investment review
• Referrals to other professionals (for example, tax, accounting, and legal)
• Getting your overall financial house in order

What I am getting at is that the greatest “value” that a financial services advisor(s) can attempt to deliver is helping clients modify and control their behaviour.  Many long-term investment studies have shown that the greatest factor in investor success is not investment performance, but investor behaviour!  One of the greatest things a financial services advisor can offer is to be the “sobering second thought” and help clients to act on logic, not on emotion.  The markets have no emotion, only people do.  I have watched many people react to the market solely on emotion, which in hindsight can be a very expensive way to make decisions.

Ultimately, how you define “value” is completely up to you.  After all it is your money! If you are looking for the best investment every year, and if you do find it, please let me know — I would love to hear about it (as would all of my clients)!

If you are looking for overall financial help and guidance, with a “sobering second thought,” then you may want to consider working with a Certified Financial Planner professional.  They won’t always deliver the best return, but they can certainly help you to keep your financial house in order.  Most of the people who I have met with find real “value” in this type of relationship.

At the end of the day, if you achieve your financial goals, then you will be happier in your own life.  It doesn’t matter what you friends and neighbours are doing. It does not matter what is on the nightly financial news. It only matters what you do in relation to your own personal goals.  Are you on track to achieve them, or not?

Are you getting “value,” or not?

— Stephen Cox, Certified Financial Planner

Stephen Cox is a Certified Financial Planner professional with Desjardins Financial Security Investments Inc. and Desjardins Financial Security Independent Network in Halifax, N.S. Email your questions or comments to Stephen at steve.cox@dfsin.ca or check out his website at stevecox.ca.

Mutual funds distributed by Desjardins Financial Security Investments Inc.

Life and health insurance distributed by Desjardins Financial Security Independent Network.

Fee for service financial planning is done through S. Cox & Associates Wealth Management Inc.