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How much money do you need for your retirement? How can you successfully save this amount? How do you choose the right RRSP? Is it better to pay down debt or invest? How much should you put into your FHSA this year? Should you go for the HBP or the TFSA for your first home purchase?
The world of personal finance is not an easy one to navigate… In fact, managing your finances is a daunting and complex task that requires knowledge and expertise that only a few have mastered. That’s why it is so beneficial to be accompanied by a financial advisor – ideally an independent one – who can help you reach your objectives and achieve your goals in life.
Notice how we emphasize the importance of independence, let us explain why…
What is an Independent Financial Advisor?
A financial advisor – also known as a mutual fund representative – is a specialist who helps you develop a plan to achieve your short, medium and long-term financial goals.
Their 360-degree view of your financial environment allows them to recommend the strategies that are right for you, to advise you on savings, debt and retirement planning, as well as help you purchase mutual funds that are appropriate for your personal situation. In addition, their expertise and guidance allows you to optimize the use of your RRSPs, TFSAs, FHSAs, RESPs and more.
When a financial advisor is independent, as we are at MCB Group, he or she is not affiliated with any financial institution. In our case, we are associated with a private investment services firm, PEAK Financial Group.
How does this benefit you? We give you 9 reasons below.
9 Reasons to Choose an Independent Financial Advisor
1. Unbiased advice
An independent financial advisor is free to be objective when analyzing your needs and making recommendations as they aren’t financially linked to any financial institution or investment company.
2. A wider choice of financial products
Unlike an advisor working for a financial institution, an independent advisor is not limited to the financial products offered by his or her banner.
They can compare a larger number of products available on the market and stay abreast of new developments in order to offer the appropriate options for your needs and your reality.
3. More diversified assets, less fuss
To reduce risk, diversifying your asset portfolio across different institutions is a strategy often recommended. But how do you do this when your financial advisor is limited to one institution? Well, you have to deal with several advisors at different financial institutions in order to combine different products. This makes the process more complex!
With an independent advisor, you don’t have this problem, because they can offer products from various institutions. Moreover, being the only person involved in your file allows him or her to have a global vision and to optimize your portfolio accordingly.
4. Your interests first!
According to a study conducted by Credo Consulting and shared by Finance et Investissement, respondents who have an independent advisor are more likely to feel that their advisor puts client interests ahead of their own.
In the study, participants were asked to rate their level of agreement with various statements about their financial advisor on a scale of 0 to 10, where 0 meant strongly disagree and 10 meant strongly agree.
For the statement “My advisor puts my interests ahead of his or her own,” those whose advisor was from an independent firm gave a score ranging from 7.3 to 8.5 out of 10, while those whose advisor worked at a banking institution gave scores ranging from 6.7 to 7.2.
5. A customized financial plan
Home, travel, car, retirement, business start-up… Whatever your objectives, an independent financial advisor knows how to listen and set up a customized plan that’s adapted to your reality.
Moreover, as mentioned previously, through the flexibility of their offer and the impartiality of their advice, you can be assured that the proposed plan truly fits your unique needs and best serves your interests.
6. Greater accumulated wealth
It is proven that when accompanied by a financial advisor, a person accumulates more assets over a longer period of time than someone who manages his or her finances independently. After 15 years, we are talking about an average of 3.9 times more assets!
Source: The Gamma Factor and the Value of Financial Advice, Claude Montmarquette et Nathalie Viennot-Briot, CIRANO, 2016.
7. Better saving and investing habits
According to four out of five investors, having an advisor also leads to better saving and investing habits. Good financial discipline is the key to improving the value of your assets and reaching your goals!
In fact, the savings rate for people with a financial advisor is 10.8%, while the rate for people without an advisor is 6.7%.
Source: The Gamma Factor and the Value of Financial Advice, Claude Montmarquette et Nathalie Viennot-Briot, CIRANO, 2016.
8. An educational background you can trust
To attain the certificate giving them the right to practice, a financial advisor (or mutual fund representative) must pass one of the following exams:
– The Canadian Securities Course;
– The Investment Funds in Canada (IFC) Course.
In addition, they must successfully complete a 90-day training program and the Canadian Investment Funds Course. Once this is completed, they will receive a license to practice from the Autorité des marchés financiers (AMF).
Furthermore, throughout their career, they must take continuing education courses to keep their knowledge of various financial products up to date, in addition to perfecting their general investment skills.
In short, the financial advisor profession requires rigorous training to ensure the public’s safety.
9. A regulated practice
In Quebec, the financial advisory profession is regulated by the Autorité des marchés financiers. This organization supervises the activities required to become a professional in the financial sector and ensures compliance with the laws in force in Québec.
Are you looking for an independent financial advisor after reading these facts? If so, do not hesitate to contact us.contact us
