Do you have a solid financial plan — one that was developed especially for you based on your needs and with an eye toward what you want your finances to be in the future?
According to Ed Rempel, a financial blogger, fee-for-service financial planner and tax accountant, you need a strong plan to ensure that your finances tomorrow, next year and at the time of your retirement will be exactly where you need them to be.
It’s not always easy, he concedes.
After a quarter-century of helping Canadians develop and manage their financial plans, he says he still meets new clients whose previous financial plans weren’t really very effective. According to him, many people who call themselves financial planners really aren’t. Instead, they provide clients with slick packaged cookie-cutter documents that look cool and read like they mean business, but they just aren’t effective. Often they are just investment projections, not a financial plan about your life. If you check out Ed Rempel reviews online, you’ll see that his clients appreciate the level of expertise he provides to them.
What he does, he says, is what he believes all financial planners should be doing. He creates solutions tailored for each particular client rather than any sort of cookie-cutter formula.
According to Rempel, his mission is to help his clients and to protect them from what he terms “financial quackery.” These are sales pitches by financial product pushers who are more concerned with making a sale than helping a client.
Ed Rempel reviews aside, he certainly has the professional background to know what he’s talking about. His experience includes 25 years as a fee-for-service financial planning professional who has written plans for nearly 1,000 families. In addition, he’s helped more than 600 clients adhere to their financial plans which encompass managing more than $100 million in investments. He’s been a tax accountant for 35 years, although not working as an accountant since he became a financial planner. And for the past 15 years he’s been active as a blogger, covering a wide range of financial planning, money management and investment topics.
So what does he advise?
While he’s quick to note that every person and his or her situation are different, he believes in starting with a real financial plan.
One of Rempel’s peeves is what he calls “The Fake Financial Plan.” This is the document that he says is compiled after most advisors make their clients answer a few basic questions. The advisors input the answers into a computer and five or 10 minutes later, they get a printout composed of beautiful color pages, a cover page, several graphs and charts, and information about the company from which the advisor recommends purchasing financial products — which is generally the company that employs the adviser.
Rempel doesn’t do that. Instead, he has a long conversation with the client to figure out the individual’s real-life financial objectives. Then, he creates a custom made plan that’s unique to each of his clients.
If you have never explored financial planning to any great extent (if at all), Rempel offers a general series of events that he believes apply to everyone.
First, it’s important to have a financial plan. It is like a GPS for your life. Second, open a tax-free savings account (TFSA) and/or a registered retirement savings plan (RRSP), depending on which your financial plan says is most effective for you. If you’re currently earning less than $50,000, prioritize the TFSA. Then, after you’ve contributed the optimum amounts to your RRSP and TFSA accounts, the next thing you want to do is invest in non-registered accounts.
As far as investments are concerned, Rempel suggests not investing in individual stocks. The 2 most effective methods are to either invest with the world’s best investors or invest with low cost index investments. Rempel works with 2 elite portfolio managers. One that creates a portfolio of All Star Fund managers (the world’s best investors) and one that clones the major indexes and charges his fee mainly based on performance – a percentage of your return above the index.
Once your plan and investments are in place, it’s important to meet or talk with your financial planner on a regular basis. For one thing, you want to monitor your investments. For another, life changes can occur that will make it necessary to adjust your plan from time to time.
The most important thing says Rempel is that a smart, solid financial plan, when set up correctly the first time, should serve you well for many years.