Tag Archives: financial planning

End Financial Avoidance and Reclaim Your Power Today

By Sheila Walkington, co-founder and CFO Money Coaches Canada and the Women’s Financial Learning Centre

Action Changes Things edited blue

 

Most people procrastinate from time to time, it’s human nature to put off tasks we believe to be unpleasant or time consuming. But the habitual putting off of our responsibilities, especially our financial responsibilities, transforms procrastination into avoidance. Avoidance —Stage 2 of the 7 Stages of Financial Well-BeingTM —is one of the most potentially damaging stages on the path to financial fulfillment.

Are you in Avoidance?

It’s essential to understand that financial well-being comes with a deeper understanding of where you stand with money, emotionally and financially, developing concise and attainable goals, getting organized and implementing a manageable plan to move forward. The 7 Stages of Financial Well-BeingTM is a framework that will help you better understand where you are, and what actions to take, as you move towards Financial Fulfillment. Continue reading →

Leave a reply

The Real Secret to Making Smart Investment Decisions

By Tom Feigs, CFP®, CET

As a fee-for-service financial planner it’s not unusual to be approached for a “quick” portfolio review. “Can you just look over my investments?” or “Can you tell me if I’m saving enough?” As much as it’s in my nature to want to help people, it would be unethical and unprofessional to advise someone without a comprehensive look at their finances and a clear understanding of their goals.

The idea that investments are priority one is a by-product of how traditional financial advisors are paid – commission on investment sales. In fact, where and how to allocate your funds are decisions that should only be made after reviewing your personal situation and needs.

Imagine your financial journey. The destination is your retirement. Your personal framework (income, obligations, health, family commitments, risk tolerance, age) represents your vehicle and the road map is your various goals. Your investments and savings are the fuel to get your vehicle to your destination.  You wouldn’t be looking for fuel before having a car and directions.

I work with individuals and couples that earn upwards of $150,000 a year, and because of the possibilities their income allows, they will all have their own set of priorities and cash flow needs for retirement. They also have various personal situations (for example, some people may have family in distant locations, others have no children, others have health concerns and still others have various complexities in their personal and business lives.)  All this information is vital to the financial plan we create together. Continue reading →

2 Replies

Why the short answer may not be right answer

By Alison Stafford, CFP®

Money questions often appear straight forward, for example: should I pay down my mortgage or contribute to an RSP? But rarely, if ever, is one decision about money not impacted or influenced by your complete financial situation. And it goes far beyond the numbers, some of the biggest factors to consider don’t involve numbers at all; they are your goals for next week, next month, next year, five years and on into retirement.

iStock_000044553590_MediumPart of my role as a Money Coach is to help people create a plan that encompasses their entire life. Their needs for retirement don’t stand in isolation from their dream to send their kids to university, or even to send them to summer hockey camp; it all has to be managed from the same income.

Returning to the “straight forward” question; should I pay down my mortgage or contribute to an RSP?, I would want to know a lot more about your current situation: What’s your mortgage rate? Are there penalties to prepay? How would you invest your RSP? What is your risk tolerance? What fees are you paying? Are there other goals you should be addressing first? Such as; paying down credit card debt or saving for your children’s RESPs? Are you considering home renovations? Are you thinking of selling soon? When is your mortgage due? Even very personal circumstances, such as; are you considering a divorce? may have an impact on determining the right answer for you.

Continue reading →

Leave a reply

September is a great time to check-in with your financial goals

No matter how many years it’s been since we’ve tossed a graduation cap in the air, the back-to-school energy of September motivates many of us to re-commit to moving forward in our lives; making it the perfect time to check-in with our financial goals.

CROPPED UPDATED-7-Stages-of-Financial-Well-Being-732x1024As Money Coaches we help people progress through the 7 Stages of Financial Well-Being™ to ultimately achieve financial fulfillment. A great way to set goals is to recognize which stage you are in and to understand what you need to do to move to the next stage. You may be able to determine where you are by reading the descriptions of each stage in the graphic (click the image to enlarge), but you can also download our 7 Stages of Financial Well-Being™ Quiz to see where you stand.

Maybe you are already very clear about which of the 7 Stages you are in, yet you feel stuck. Continue reading →

Leave a reply

Money Coaches in Conversation – What you should understand about fees and financial advice

Recently Women’s Financial Learning Centre and Money Coaches Canada co-founder Karin Mizgala sat down with Money Coach Noel D’Souza to discuss the changing landscape of financial advice in Canada.

Women's Financial Learning Centre and Money Coaches Canada co-founder Karin Mizgala

MCC & WFLC co-founder Karin Mizgala

Karin: As someone in the financial industry, it’s very common to be asked by people outside the industry, to explain the different fee structures of financial advice. So, Noel, let’s start with an overview of the common compensation models available to Canadians today.

Noel: The most prevalent model we see in the industry is the commission-based advice model, where an advisor sells products, typically mutual funds or some other investment product, they may also sell insurance, and they receive a sales commission for making the sale and also quite likely receive a trailing commission which is supposed to cover on-going advice and services. Usually the client never sees the commission fees, and we’ll be discussing how that may change in the future, but usually those fees are hidden within the cost structure of the product they are buying.

The second type is fee-based. An advisor will charge the client fees based on the size of the assets under management, a percentage of the total portfolio.

The third model, which is up and coming, is the model we work under; fee-for-service. Clients pay a fee directly and explicitly to the advisor for services rendered and it’s not tied to product sales, or size of assets, in any way.

Karin: So that will sound pretty straight forward to most people, why does it become murky, what are the implications for someone seeking financial advice? What are the benefits and shortcomings of each model? Continue reading →

1 Reply

Meet our Money Coach: Annie Kvick

“My family and I get out and enjoy life. I want that freedom for all my clients.”

For many Canadians, taking charge of their finances feels like being asked to scale a mountain. They may feel overwhelmed, intimidated, or afraid of making a misstep that sends them tumbling financially backwards.

Money Coach Annie Kvick, knows what it feels like to face a big challenge. At 25 years-old, and newly married, Annie and her husband left family, friends and careers in Sweden to begin a life in North Vancouver, British Columbia. The young couple realized that money management would be vital to establishing themselves in their new country, and Annie committed herself to the task. Continue reading →

Leave a reply

The ABC’s of Financial Planning

Karin Mizgala

By Karin Mizgala

A financial plan is a roadmap
to help you define your financial life goals and to give you the tools, information and structure you need to organize your finances to live the life you want.

  • How do I balance today’s goals with a secure financial future?
  • Do I have enough money to retire comfortably?
  • Which investments or financial products are suited to my needs?
  • What do I need to know to make the best financial decisions?

A financial plan will help you answer these questions in an organized, structured manner. By creating a financial plan, you will know what steps you need to take to get you from where you are now to where you want to be with more confidence and greater ease.

A comprehensive written financial plan generally includes the following:

  • A clarification of your short, medium and long term goals
  • A statement of Net Worth
  • An analysis of your cash inflows and outflows (budget and debt strategies)
  • A review of your current investments and investment strategy advice
  • Retirement/Financial Independence projections including pension decisions
  • A review of your insurance needs, group benefits and estate plan with recommendations
  • The action steps needed to implement your plan and stay on track

Do I need a financial plan?

If you are feeling anxious about your finances, a well-developed financial plan can give you the comfort, confidence and direction to ensure that you are on track to meeting your life goals and what steps to take if you’re not there yet.

Or if you are experiencing a major life change or transition such as retirement, marriage, divorce or job loss, the process of creating a financial plan will help you systematically consider and address the financial complexities these life changes bring.

Clients who have a financial plan report that they have a better handle on their cash flow, have a plan to pay down debt and are more prepared for emergencies. They have a better understanding of their investments, they know what to do to retire comfortably and have more peace of mind.

A Financial Planner typically provides a written financial plan which outlines your goals, problems and considerations, recommendations and an action plan. Although the planning document is a valuable tool, the real benefit is in the planning process itself. A trusted advisor who understands your goals, your relationship with money and the financial numbers can provide solutions to create more joy and ease in your financial life.

Here’s how one of our recent clients described the benefits of the financial planning process:

“I felt scattered and not really sure where to start or what specific areas to look at. Now I feel like I have been given a direction and a map to follow. I could see exactly what I needed to do, and I felt more confident following through with these steps knowing that there was someone I could ask if I ran into any problems. I also have tools that I can use to check up on my own financial health in the future.”

What is the difference between a Financial Planner and an Investment Advisor?

A Financial Planner uses the financial planning process to help you manage all aspects of your personal finances more successfully. All of your financial needs will be considered including: budgeting and savings, debt management, tax planning, investments, insurance, retirement and estate planning. The ideal Financial Planner will also place a strong emphasis on personal financial education so that you are better informed, more confident and in control of your financial affairs.

An Investment Advisor focuses primarily on recommending, implementing and managing your investments. Some Financial Planners also provide investment management services.

Financial planners generally fall into 2 categories:

1. Financial Planners licensed to sell investments or insurance
Typically this type of financial planner will provide you with a financial plan for free if you purchase (or plan to purchase) investments or insurance with them. Others referred to as “fee-based” financial planners may charge a fee for the plan then give you the option to invest or buy insurance from them.

The model of financial planners licensed to sell financial products is the most common one with the advantage of being a one-stop-shop for clients looking for financial planning and investment management. However, there is also a potential for conflict of interest in a model that blends planning advice and financial products. Ask for full disclosure on what services you can expect and how the planner will be compensated.

2. Financial Planners who don’t sell financial products
“Fee-only” Financial Planners or Money Coaches charge clients a fee either hourly or by project. Fees typically range between $1,500-$4,000 depending on the complexity of planning needs.

Some “fee-only” Money Coaches provide comprehensive financial plans and others will help you address specific issues such as getting out of debt or saving for the things you want.

Note: The terminology in the financial advice industry is not standardized so be sure to ask questions and to clarify what you can expect from your advisor no matter what model of financial advice works best for you.

How do I find a Financial Planner?

Finding the right financial planner usually takes some homework and investigation. You can start by asking friends or family for a referral and you are wise to interview more than one Financial Planner. You can get tips on questions to ask and how to find a planner on the Financial Planning Standards Counsel website. The personal finance magazine MoneySense also maintains a data base of “fee-only” financial planners.

The clearer you are on what you are looking for in terms of guidance and what you expect from the relationship, the better you will be able to find a Financial Planner that works for you. Do your homework, take advantage of complimentary consultations, ask questions and trust your instincts.

If you would like some support and guidance in creating your financial plan, check out our upcoming weekend workshop Smart Money Essentials offered through the Women’s Financial Learning Centre or book a complimentary consultation with one of our fee-only money coaches.

1 Reply