This is the story of an intelligent person, but who claims to understand nothing about finances, despite having gone to the doctorate! Here is his portrait:
End of quarantine, claims to have always had “good” salaries;
Is a tenant by personal choice;
Contribution the Government and Public Employees Retirement Plan (RREGOP) for several years;
Transferred $ 100,000 from a retirement plan to a financial institution after changing employers;
Take no risk in her portfolio because she does not understand the basics of investing;
Consume as you wish (no budget), because it does not have luxurious tastes and does not lack cash;
Consult all financial columns available to him.
Here is his heartfelt testimony: “When I brought my $ 100,000 back to ‘financial institution X’, I was greeted with open arms, saying that I was an ‘A’ client, that my advisor would review my situation each time. year (never heard from since…), etc. He does not have the “right” to really advise me, so it is a long ordeal for me to make decisions about my finances or insurance. Every time I go to “financial institution X”, I say to myself: “I cannot believe that with my education, I do not understand anything, and that everyone sits on this chair and knows how to make the right decisions!” “
Advice before products
Madam’s disappointment with her branch advisor, I often hear in my office. Many choose large financial institutions for the stability and quality they inspire.
However, integrated financial planning services are often reserved for wealthier clients. Not to mention that the assigned advisor changes regularly due to the turnover of human resources and so even the monitoring of a $ 100,000 investment account will probably never be personalized.
Madame is irritated by the fact that her advisor says that she doesn’t really have the right to advise her, and I understand her! You should be able to expect a competent professional to interpret your goals and needs, explain your options, and guide you through the choices that are in line with your goals and values!
I don’t have a quick fix here: Not everyone can benefit from the services of an independent financial planner.
But if your need is more to get advice on strategic elements than to explain to you – understand “selling”, here, of course – financial products, you will be more satisfied by finding an independent financial planner.
In the case of our reader, on the other hand, it is very likely that only the possibility of considering a long-term relationship characterized by mutual trust and knowledge will allow this feeling of incomprehension to be alleviated.
Do you recognize yourself?
“I signed up for a McGill online personal finance course, but I choké because it’s like learning quantum physics for me, I find it so complex, ”she continues.
Dear reader, I assure you: you are not alone in not understanding all the recommendations and financial products.
One day I will add to my professional card (if the paper cards still exist!) A new title: that of translator. Investment statements, insurance policies and legal documents are written in technical vocabulary.
When the client leaves the office they need to understand their situation better, so it needs to be interpreted in clear and accessible terms. When I consult a health professional, I find him competent if he succeeds in popularizing his diagnosis and recommendations. I consider that financial advisers have this same duty.
This feeling of impostor is perhaps accentuated by the abundance of information available on the Internet. I encourage everyone to take a financial literacy course. However, if this is too painful, you have the option of choosing a trusted professional who will guide you on the road to retirement. In 2021, it is possible to become an expert in all areas, but you can take that pressure off yourself and prioritize what makes you tick.
You have to see it to believe it
“But deep down inside, I have a little retirement anxiety, to be sure. I do not move forward by meeting my advisor, because he cannot advise me as I would like (like “taking charge” … I do not want to do a baccalaureate in finance …) ”.
Rest assured, Madam, you do not need to do a baccalaureate in finance after your doctorate!
In my eyes, your situation is very simple, and it would only be enough for you to visualize a few retirement scenarios to fix you on your future. The first step – probably the most difficult according to your testimony – will be to budget to establish your cost of living. This is the most subjective hypothesis, but the most important.
It will then be possible to explain your situation to you according to this cost, depending on your current savings level. The goal is to show you clearly how many years of retirement are funded, a concrete visualization made possible by financial planning software.
There is no point in playing the ostrich for several more years. You will either be fixated on what changes need to be made or freed from your anxiety because you have received good news.
Breaking out of a vicious circle
In conclusion, my first advice to our reader is to get out of this vicious circle: I do not act because I have no knowledge, but as I seek to improve my knowledge, I do not act….
She can take a financial or retirement planning process without knowing all the answers like an expert. In any case, this is a process spread over several meetings. Whether our case consults within its institution asking to change advisor or calls on a financial planner (iqpf.org), more regular communication would allow it to evolve.
At your age, the fact of not taking care of your investment portfolio (the return of which is therefore probably very low) and of not having the right time on your retirement involves in my opinion more risks than the possibility of deceive by making a decision.
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