These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
We all work hard for our money. Getting advice on how to best use it, budget, borrow, invest it is a daunting task. I believe there’s no higher level of trust than choosing a financial advisor to help you with your financial needs. Financial advice takes many forms. Could be qualifying for a mortgage to buy a home, choosing a credit card, choosing a bank account, planning for retirement, savings for education, etc, etc. In every instance, there are a number of sources for advice. You work hard for your money, so take the time to investigate who you want to help and guide you with your decisions. In many instances, you will need more than one advisor to help with your different decisions.
In general, there are four sources for advice: Banks/Credit Unions, Independent advisors/brokers, Retailer affiliate financial services, Self Help/online web based. Each has their pros and cons and you may ultimately use a combination of services to assist with your financial needs. Full disclosure – I worked 25 years in the banking industry, have been an independent broker the last 10 years and spent 1.5 years working for an online brokerage, so I have first hand experience with most financial services business models.
Most Canadians deal with a bank/credit union for their basic bank account and cash transaction needs (ie chequing account, ABM, etc). Banks also provide a complete range of financial services such as loans, mortgages, credit cards, savings, investments. Today, they generally use specialists for different services such as mortgage specialist, investment and retirement planning specialists. Most people think their local ‘banker’ provides friendly, unbiased advice. It may be friendly, but it is not ‘unbiased’. Bank personnel are generally limited and incented to promote their particular institution’s financial services. These services are not always ‘free’. If there aren’t obvious service charges, there are often imbedded fees for the services. Banks have sophisticated and convenient online services making them very convenient.
Independent advisors/brokers can take many forms. In general, they’ll have an area of specialty which will be regulated. There are Mortgage brokers, investment advisors/brokers, insurance advisors/brokers to name a few of the most common. In general, these advisors are not limited to one supplier but have access to multiple companies to provide financial solutions for their clients. Having access to multiple suppliers provides one-stop shopping for clients within that specialty. Specialization enables advisors to stay abreast of developing trends in an increasing complex financial services industry. Independent advisors/brokers will either charge a consulting/service fee for their services or will receive compensation directly from the supplier they place the business with, usually in the form of a commission and/or trailer.
Retailer services can take the form of affinity credit cards, affinity loans and financing. They are generally easier to qualify for, may have ‘signing’ inducements such as interest free periods or gifts. Largely, they are convenient as they are provided on the spot (ie car financing, etc) convenience. The price for this convenience however is generally longer-term borrowing/interest costs.
Self-Help/online services are gaining increasing traction in financial services. As the saying goes ‘Just google it’. Online platforms are becoming increasingly sophisticated, more transaction oriented and providing greater levels of ‘advice’. It started years ago with the evolution of online investing/brokerage but has now evolved to online ‘robo-advisor’ services, loans, credit cards, mortgages. The key item for lower fees/interest is there is limited to no customized advice that accompanies these platforms. Placing the decision responsibility squarely on the shoulders of the client. While many people will be comfortable making their own decisions, the challenge going forward is having the time to monitor and adjust the decisions going forward given we have increasingly complex lives and demands on our time.
Choosing a combination of financial advisory services can be daunting, but take your time to make a decision that best suits your needs, your knowledge level, your time availability, and your comfort level. Many studies show that proper financial advice will enhance returns and financial success. You may engage a few advisors to satisfy different financial needs. Just like using a doctor for your health, a dentist for your teeth and a mechanic for your car. Wrong choices with respect to financial services can have detrimental effects to your wealth and financial position.
Share these ideas with friends and family and come back to check out daily financial tips and ideas. If there are subjects you wish covered or questions, please email me and I’ll include them in future posts.

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