The Advantaged Investor: Summer Financial Planning Tips (Ep 98)

Financial Planner Yannick Rivest joins the host Chris Cooksey to discuss summer financial planning tips, including:

1. In your opinion how does a financial planner help with investor success?
2. How important is it for your plan to evolve as you do and your situation changes?
3. Spring/summer cleaning – as we start thinking about summer and holidays, what are some tips for people who will be distracted by summer fun?
4. What are some of the common ‘mistakes’ you see when talking planning with clients/investors?
5. At Raymond James we are excited to be able to offer our Total Wealth Solutions – what does TWS mean?

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Transcript

Chris Cooksey: Hello, and welcome to the Advantaged Investor, a Raymond James Ltd. podcast that provides perspective for Canadian investors who want to remain knowledgeable, informed, and focused on long term success. Today is June 21, 2024. I'm Chris Cooksey from the Raymond James Corporate Communications and Marketing Department, and today, Financial Planner Yannick Rivest joins the podcast for summer financial planning tips. Welcome to the Advantaged Investor, Yannick. I hope you're doing well.

Yannick Rivest: I am. Thank you. What about you?

Chris Cooksey: I am doing excellent. It's a beautiful day today, excited because it is Friday, of course looking forward to the weekend and this conversation because we're going into that giant summer holiday season, your extended weekends and all that. We know we earn our summers here in Canada, so to me, it's understandable why people just want to head out and explore the country or head to the lake or see family and friends. I'm very interested to hear your thoughts on how investors can help make sure their portfolios will continue to do what they've been designed to do while maybe their attention lies elsewhere. Does that sound good?

Yannick Rivest: It does. Yeah.

Chris Cooksey: All right. So let's just start off with a basic question, more general financial planning. You know, how does a financial planner like yourself help with investor success?

Yannick Rivest: So what do we have to know? First thing first is with a financial plan, we do measure the feasibility of the investor's goals and as an example, can they keep their current lifestyle all through their lifetime? We also evaluate if they put enough money on the side for their projects. We evaluate their current strategies to see if they maximize their current situation. We analyze tax efficient strategies to ensure that the investor saves money today, tomorrow and after tomorrow, which roughly means in the short term, mid term, long term, also in order to help them save taxes over a lifetime and increase their net worth. More and more and there are studies that show that a client that works with a financial planner and advisors increased their net worth by 2-3 times more than a client that doesn't deal with an advisor and a financial planner. There's really a big value having a financial plan and working with a financial planner and your advisor.

Chris Cooksey: Totally makes sense. I think the financial planner and the advisor, obviously, there's a lot of knowledge there, but one of the great things is it's more people focused on what's important, keeping emotions in check. Is that, is that something you would agree with? Now, how important is it for a person's plan to evolve as the person's life evolves? Because obviously what you think is going to happen when you're 25, life happens and gets in the way. So how does that affect things?

Yannick Rivest: Completely agree, so not to quote one of my favourite movies, Bridesmaids, people change and we change and it's true. But like when we build like a financial projections or financial plan, really what we do, is we take the client's situation and we project it into the future. Based on assumptions, like inflation, rate of return, even the level of expenses is to have a good grasp on what can happen in the future, trying to see future blind spots. Nobody has a crystal ball or a working one, we don't know the future. So that's why we love to revisit the financial plan every, roughly, three to five years, or if there's an important change in their life, because we want to see, should we change the current strategies or maybe change them? So really important for that point. And I would say it's the same thing with your will. And we, when we look at your will, some people, they just draft it and then leave it in a drawer all their lifetime. But we change, our objectives change, it's always good to reread your will also every three to five years and maybe rewrite them.

Chris Cooksey: Okay. Now obviously we're all familiar with spring cleaning or getting ready for the summer. You know, get your patio ready, getting the barbecue ready, all that stuff. And if we're thinking about summer and holidays, what are some of the tips for people who may get distracted by this summer fun?

Yannick Rivest: So something to take into conservation is while we're enjoying the beautiful weather, we are not good at budgeting. We're not really good at that because I call it vacation mode. In vacation mode, there's no budget, there's no limit of spending. And I’ll figure that out in the future. I'll look at the bill or maybe look at the bill once I'm back. So it's good to be proactive about that and trying to measure your expenses. I have my own little saving account and I put a name to that saving account called ready for an adventure and I put $75 per week into that account just for vacation. Right now, this morning I have $1,000 in that account. I know I'm leaving in September for a cruise. I can't wait, but let's say it's $1,500 that's going to be there in that account in September. I know how much I can spend on stupid things, like maybe some spices because I love to cook and I love to buy spice from around the world or like a new t shirt that I might not wear, but we need to limit our expenses and the best way is to be proactive about it and to put some money on the side and spend that amount of money, not more.

Chris Cooksey: That makes sense. Now what are some of the common mistakes you see when talking, planning, with clients and investors?

Yannick Rivest: Biases that people have. And there are so many biases because people think that there are some planning recommendations for everybody, like, I should keep my RSP in a RIF until the age of 71, or I should take my CPP at the age of 60. So many biases in planning, and my answer to them is, it depends. Because everybody's different, which is the beautiful thing about human beings, we're all different. But same thing too, we have to always look at somebody's situation with a holistic approach, because the answer will be different for everybody.

Chris Cooksey: That makes sense. Now, when we're thinking specifically about summer part of this, it's not about watching your investments throughout the summer because presumably, if you have that good plan, that's all set up ahead of time., you don't need to worry about it per se, unless go through one of those life events where it would require a change. Is that true?

Yannick Rivest: It's true. And we have to remember something I love to say also, long term strategy needs long term goals, and we have to treat it as long term or short term strategies, short term goals directly. We're going to look at day to day. Let's say a bank account that is short term, you can look at it like every week and it's fine, but for your investment or retirement for long term strategies, talk with your advisors, but have faith in your advisor because they are there to help you ensure that those assets grow over time.

Chris Cooksey: And I guess you have to match the goal to the strategy, right? Like if you have your down payment coming up, you don't want to put it in an asset class that's too risky.

Yannick Rivest: Exactly and it's super, super important. We call it time horizon. When we'll look at the purpose of those accounts, let's open an RESP to fund the education of a child. We're going to look at what is the child’s age right now? When will they tun 18 and how many years left. So we can invest that way because if the child is older. those investment need to be safer and a longer time horizon, we can go more aggressive.

Chris Cooksey: Now at Raymond James we are very excited as a firm to be able to offer our, what we call our total wealth solutions. What does that mean exactly though?

Yannick Rivest: So first thing first, within the industry, I'm talking about investment advisors, there is a shift happening, which I'm totally for it. Advisors are becoming now wealth advisors because we no longer manage only investments. We manage wealth and advice and with total wealth solutions, and I'm so proud that Raymond James, we do offer that. It's a team of specialists that are there to advise clients when needed -- within that team, we have investment manager, insurance solutions, tax solutions, estate and trust services, charitable giving, and of course financial planning, that's why I'm here. What we do really is we partner with the advisors and their clients; we engage really in a deep discovery process to learn about the client's goals and design a personalized plan to implement and then monitor and adjust on an ongoing basis with the client. And we connect the client with key specialists who are dedicated to help them use their wealth to create the life they envision.

Chris Cooksey: Now, it's amazing, because I'm sure like like myself, even though I'm just on the marketing side and don't have the depth of knowledge that that you would in these circumstances, but I have friends and family who ask me questions and I’m always, you should get an advisor and not rely on the communications guy. What are some of the common questions you hear from family and friends?

Yannick Rivest: I receive so many questions, all different. One of the biggest questions I receive is, where shall I put my money? Should I put it toward my TFSA or my RSP? Do I put enough money away? Is my pension enough? And unfortunately, my answer is always, it depends. Because it always depends on so many factors. I go more in detail, trying to see their situation, but there's no solutions for all, unfortunately.

Chris Cooksey: But like you just mentioned, it's funny, people always look at, what should I be investing in, rather than what am I trying to achieve? Is that, is that a common thing you run into?

Yannick Rivest: It's a common thing, and also, people try, we all want to make more money, easier, faster, and everything, and it's all about trends, and there's so many trends we've seen in the past, and when we look at trends, it's, okay, maybe one asset has really increased. Let's talk about GameStop. Super trend that started on Twitter / X. I don't remember exactly what happened, but everybody started to buy those shares and increase the price, because it's a free market. It's offering dividends directly. A lot of people missed the trend, unfortunately. And we saw that with bitcoin, we saw that with so many NFTs, I don't know if you remember NFTs in the past and you were able to buy like for $10 million, this pixelated Bored Apes, the pixelated art, which I tried to do for fun. I'm like, okay, I'm going to open Microsoft paint with the grid, put it like super high pixelated and I'm going to like, I don't know, a paint a mountain and trying to sell for $10 million, which never happened. But. If we always look on trends, we're always missing the boat, so we need to always look on the long term. That's the best strategy, and really working with your advisor for that, they have the knowledge. They do that full time. They don't just read an article on a weekend and be like, okay, I know what to do next, because nobody knows. Again, nobody has a working crystal ball. Because you can buy a crystal ball, but it doesn't work, really. So always keep your eyes on the long term. That's the best thing to do.

Chris Cooksey: So as we go into summer, trust your plan. Hopefully you have one. If not, talk with your Raymond James advisor. They can hook you up with a meeting with someone on our financial planning team like Yannick here. Trust your plan. Don't go chasing and make sure that you're budgeting for those vacations and those fun times. And be proactive. It's your savings, work together with everybody to get the solution you require. Awesome. Well, Yannick, I want to thank you for taking the time today. Really appreciate it. Hope you'll join us again in the future.

Yannick Rivest: I'll be pleased to thank you so much, Chris.

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