The Top 5 Reasons People Stay with their Financial Planner

stupid reasons people stay with their financial planner

It’s a brand new year. A year to make some concrete decisions about where you want to be personally and financially. In the financial planning industry we hear this all the time. People stay with their existing financial planners for various reasons. When you hear their reasons, one can conclude that people find it easier to do nothing about their financial future than doing something different, even if it means they could make much more money with their investments.

Despite how crazy this sounds, 40% of Canadians say now would be a good time to look for a new financial advisor, however very few have intentions of doing so. Maybe when you read these it will compel you to take a different stance on your financial future than those surveyed and get a second opinion on your portfolio before it’s too late.

Here are the top 5 reasons people said they stayed with their financial planner in 2014:

5. It seems like so much work to transfer my portfolio out from my current financial planner

What’s the point of having a financial planner who costs you more money than you’re saving? Choosing the right asset allocation is one of the most important investment decision you’ll make – it’s crucial to get it right. Your actual asset allocation will change as markets move and your current financial planner should be working with you on that. Your target mix of stocks and bonds should be based on your time frame for retirement or saving goals, the rate of return you need to meet your goals, and your comfort level with different high risk investments. Before you transfer your portfolio from your current financial planner, consider getting a second opinion just to make sure your money is where it should be- this could save you thousands of dollars.

4. I haven’t heard from my financial advisor so everything must be fine.

Maybe everything is fine with your finances- but what if it isn’t? You reply on your financial planner to control your savings and ultimately when you will retire, do you really want to leave that to good faith? What if your financial situation has changed and your saving goals have changed as well? Unexpected costs of caring for your elderly parents for example. Your financial advisor should stay in regular contact to make sure they are offering you the best investments for your personal situation.

A reputable financial planner doesn’t keep you in the dark, they are sending you useful, pertinent financial updates through email newsletters on useful financial strategies you can implement, they have financial planning blogs to provide their customers up-to-date facts and strategies to help maximize investments and minimize risks. Effective financial planners use podcasts and audio training to help their customers get the most out of their relationship with their planners and keep them in the information loop so their clients are empowered with the key information they need to be financially secure in retirement.

3.   I like that they use all their own products and they are all in one place

Financial planners who are tied to one type of investment product line, don’t always have access to the opportunities that would best suit your financial needs which leads to some cookie cutter investing strategies. Independent financial planners have the best performing financial strategies available to them and they are able to choose only what is best suited to their customers and customize to maximize your investment situation. They are also able to provide you with a fair and comprehensive analysis of the relevant products available and recommend a suitable one for you. An advisor who only offers branded funds from their specific company may not be the best fit for you.

2. It will cost me money to transfer my account. Won’t it?

The Deferred Sales Charge (DSC) fees are decreasing penalties to sell out of your mutual funds within a period of time. Typically each year a portion of your DSC mutual funds become available to sell without penalty over a period of five years. If you do decide to transfer out, you might consider selling the mutual funds you can sell without penalty, but staying invested in the ones that have a penalty until the deferred charge disappears.

Another reminder- if your current financial advisor doesn’t have your best interest in mind, they don’t understand your saving goals, or they can’t offer you the proper investment options, you could be losing out on thousands of dollars a year! Put that number up against any small transfer fee and the numbers speak for themselves.

1. My financial planner is related or they are a friend.

Cutting ties with someone who knows intimate details about your life and money can be a scary or even emotional thought, but you don’t owe them anything. You owe it to yourself to invest properly for your future and sometimes a friend doesn’t offer the best investment options.

Don’t let one of these reasons keep you with your current financial planner. Look out for yourself first and choose a respected financial planner who believes in achieving consistent returns while preserving your capital over the long term. This should be your first step in your wealth management strategy. You need to think of yourself, your future, and retirement when deciding to stay with a current financial planner, or choosing a new one. Remember to choose a financial advisor who works with you to determine your saving goals and who offer complete financial solutions to all your investment, insurance, living benefits, tax, retirement, wealth and estate planning needs. Contact a collaborative financial planner today to discuss your options.

That sums up 2014’s Top 5 reasons people stay with their financial planner. Is this the year you drop the stupid excuses and look at options to grow your investments to where they should be when you retire? What if 2015 is your year to get from where you are now with your portfolio to where you want it to be? It could be as easy as dropping the excuses.


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