Nov 10, 2020
Financial Services companies still have a long way to go to provide the best customer experience and financial planning help according to a recent survey of Ontario Moms.
Moms working with financial advisors at wealth management firms, banks, and insurance companies are generally not the happiest consumers. These are the outcomes from a recent survey of more than 250 Ontario Moms conducted by WealthyPlanet with Movies for Mommies (MFM), a national social community for new parents.
Fortunately, there are new online tools providing do-it-yourself financial planning help and self reliance as well. You can set and keep your family's financial-life plan on track, and keep your advisor straight on your needs and not theirs.
Respondents were Ontario Moms, mostly between ages 31-40, with one or more kids. We asked financial planning expert and author, Michael Hlinka, CFA, to look at the survey results and provide some best practice tips for Moms.
Our survey found that 45% of Moms feel like they just “own” products and have no interaction with their financial service advisor. A whopping 60% only speak to their advisor once a year or not at all. Just 20% have a quarterly conversation with their advisor. We also found the Zoom and digital world has impacted Mom’s preferences as 54% would favour online conversations with their advisor.
According to Michael Hlinka, even reviewing your plan with your advisor yearly is not enough. “Your financial plan must be reviewed monthly. It is based on goals, should be continually optimized for goal achievement, and all financial products in the mix (not just investments) should be reviewed regularly. A good financial plan must monitor monthly cashflow, minimize taxes, protect your family, and eliminate debt.”
Our survey indicated 68% of Moms are aware of the fees they are paying. But if they had a choice, 86% would rather work with a non-commission, rather than a commission-based financial advisor. We asked how they felt about commission-based advisors and 65% of Moms said this was not their preference, while 10% indicate they are actually “fearful” of them.
“Always ask questions so you fully understand how you are paying for services,” said Hlinka. “Most financial advisors or financial planners get paid by fee-for-service, or they are compensated based on funds under management, or they get paid by the product providers like mutual fund and insurance companies.”
When working with a financial services company, 83% of the Moms said they want and expect to be educated. But are they getting this? Unfortunately, financial education and personal financial planning is not usually taught in schools, even though it is a basic life skill. Proper financial planning tends to be misunderstood due to the tendency to think short term and discount the need for a financial plan over the long term to consider retirement or if you can no longer work.
According to Hlinka, “Most Canadians do not ask that their advisor to do a comprehensive, long-term plan for them. And many advisors consider this unpaid service work, an inconvenience to them. This is where WealthyPlanet shines by making it easy to create an online financial plan with non commission-based money coaches who are there to educate and help you understand the impact of your decisions.”
“It is possible to take control of your own comprehensive financial plan to get better insights based on mathematics not opinions, on how to optimize goals looking over the next 20 to 30 years,” he said. “These tools incorporate advanced algorithmics, tax optimization and consumption smoothing for more accurate and smarter planning, usually resulting in significantly more money for goals such as retirement.”
You can sign up today and get a complementary financial plan assessment during the pre-launch Beta of WeathyPlanet’s planning tool.