You have your plan in hand from your advice-only planner. Now what?

There can be incredible value in financial planning. And a new and growing trend is to seek out an advice-only planner. You can access advice and pay for what you need. You do not have to fork over a percentage of your portfolio value every year. And it’s conflict-free advice. But how do you invest after receiving your advice-only financial plan?

You might also see the category referred to as fee-for-service advice. I covered the topic with this post – What is advice-only planning? That post will outline the services and costs for many of the leading advice-only planners and firms. But I also think that it’s important to pay the right price for great advice at the right time.

Investors might consider doing enough research to discover that they do not (yet) need to pay up for a comprehensive financial plan. It’s possible that you might not need a financial planner. But I do believe that there will come a time when that financial plan will be worth more than its weight in gold.

You’ve got your plan in hand, now what?

Here’s the thing. It’s called advice-only. And more specifically it’s financial planning only. When you walk out with your financial plan it will not include the actual investment recommendations. Now certainly the plan includes an investment road map. Your advice-only planner will lay out the investment plan.

And that plan will likely include the plan types (RRSP vs TFSA vs Taxable) that will deliver the greatest tax efficiency in the accumulation stage, and in the retirement funding stage. They can and will most often also recommend that asset allocation; meaning for example to invest in a Balanced Growth model within your RRSP. etc.

Keep your fees low, manage your own investments.

You can certainly manage your own investments and keep your ongoing fees at a rock bottom level. It’s possible to create a balanced ETF portfolio with fees in the area of .15%. You could use one of the one ticket portfolios with fees in the .20% range. Self-directing in its most simple form might be by way of those one ticket asset allocation portfolios.

But of course to self-direct takes a certain level of knowledge and confidence. Here’s a related post.

Should you create an ETF portfolio or go Robo?

If you’re on the journey to self-directed investing here are some go-to resources.

• moneysense
• myownadvisor
• savvynewcanadians
• findependencehub
• boomerandecho
• canadianportfoliomanager
• getsmarteraboutmoney

As always ensure that you know what you’re doing and that you can execute a simple investment plan. If you don’t know what you’re doing, don’t do it.

Your advice-only planner may hook you up with a Robo.

It’s quite common for an advice-only planner to (with your permission of course) send your file to a Canadian Robo Advisor. Your investment plan is then executed in a cost effective manner. When I spoke with David O’Leary of Kindwealth, he offered that he will often send clients to WealthSimple. As you may know many of the Robo Advisors have advisor platforms. The advice-only planners can keep track of your accounts and can ensure that the investment plan is properly implemented with respect to the account types and the asset allocation.

The fees are reduced. For example, Wealthsimple management fees are reduced to .35%. At Justwealth the fees are reduced by 20% to .40% for an advice-only referred client. Another popular destination for advisors is Nest Wealth that offers a very cost effective subscriber-based fee model.

All of the advice-only planners that I communicated with offered that they do not accept any referral fees. They uphold that promise of conflict-free advice.

In the past I have suggested that the Robo’s are a wonderful training ground. You might watch and learn and eventually venture out on your own to self-direct your own portfolio.

Your advisor may put you on a Glidepath.

Glidepath Portfolio Services is an innovative solution for advisors of all types. The process begins with a recorded 3-way call between the client, the advice-only planner and the Glidepath portfolio manager.

You can think of Glidepath as active asset allocation of passive ETFs managed to fund the client’s unique spending plan schedules. They custom manage each client’s account using methods similar to how defined benefit pensions manage assets to fund payout schedules (a process called “liability matching” in industry terms).

The greater benefit will come in the retirement funding scenarios. The proprietary technology and personal service provided in partnership with approved financial planning professionals is designed to support the cashflow necessary to confidently fund each stage of their retirement. Investments are managed comfortably within the investor’s risk tolerance level.

Dynamic spending patterns.

Spending patterns for account types often ebb and flow throughout retirement. There are many moving parts including family, the markets and financial circumstances. For example, early in retirement the RRSP may be counted on for a more generous spend rate. That will allow the delay of Government pensions. The TFSA account may then do more of the heavy lifting later in retirement. And again, there are many moving parts.

The financial planner and Glidepath portfolio manager work together on an on-going basis to support each client with plan implementation. All-important behavioral coaching helps the client stay focused and committed to the plan.

The fees at Glidepath are .50% of AUM. Here’s a blog post that describes the service for advisors. Glidepath does not accept clients directly and only works through approved financial planning professionals.

You may go Orange or with a Steadyhand.

You’ll find Tangerine Investments, Steadyhand and Mawer on the Robo and Funds page. Those are also investment destinations for advice-only clients. The planner is looking to match the client and the investment needs to appropriate investment option. They have, and use many options.

Thanks for reading. I would invite readers to continue to send me updates on their experiences with their advisors. That will help me to help readers find the most suitable advice-only planner. And let me know – how did you invest after receiving your plan from your advice-only planner?

Happy holidays and we’ll see you in the comment section.

Dale