Thursday, August 30, 2012

Choosing where to invest and with whom - Its about rapport

Yesterday I wrote about Garth Turner and his website Greater Fool. I told you about his current Canada wide tour where he's hosting seminars and (no doubt) giving lots of advice about where people should be investing their money. Given the cost of the seminar, (free) I have little doubt that there will be lots of brochures and pamphlets on chairs and tables, all flogging a variety of investment products. And likely salespeople waiting nearby.

In my opinion, probably not the best way to be making important financial decisions.

In a previous life I worked in the financial industry, so obviously I have some opinions on this subject. But don't expect me to be touting one investment over another. I'm not going to suggest that segregated funds beat mutual funds, that term insurance is better value than universal or whole life...or the reverse, that's not what I'm writing about.

Suffice to say with financial planning and investments there isn't one size fits all.

So what is important? 

Things like tolerance for risk and time horizon. What are your financial plans and goals? A 60 year old couple looking to retire in the next few years will have different needs as compared to twenty somethings with a child on the way and looking to buy their first home.

At the end of the day its about relationships in my opinion. Its about finding and working with an individual in whom you have confidence, trust, and rapport.

So then, what company?

There are more choices now than there ever have been. Years ago the answer was simple, go to the bank. For some that may still be the preferred option. Personally I think at least equal consideration should be given to the individual you're dealing with, there are lots of reputable companies offering investment and financial products. And with the banks, its rare that a representative will meet you at your home, at your convenience. Further bank employees might get promoted or moved, while individual consultants representing many established companies operate as their own proper businesses.  

And with many companies you can bundle numerous products together, which often leads to significant savings. We've all heard the ads about bundling car and home insurance to save on premiums. Well now there are strong companies that will bundle more than just home/auto insurance. You can now get mortgages, life insurance, RRSPs, RESPs, TFSAs, GICs and more...all from the same firm providing insurance for your residence and vehicles.

And as with the banks, your money is insured.  

I'm now living in Québec, and when I was out shopping for a new car La Capitale was recommended to me for auto insurance. They're a perfect example about what I'm talking about in terms of offering a whole suite of financial products and services.

I will reiterate the point I consider most important in all this. Its all about confidence, trust and rapport.

I will add one more, accessibility. Financial markets can be volatile, and so can people's lives. Whether its a change in your personal circumstances or a major event in the markets, I strongly suggest working with a representative or consultant who makes time for their clients.

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