You can find financial advice everywhere, but where do you find the right advice to achieve your goals? If you’re deciding between a big bank and independent financial advisors, Ottawa offers both. However, it’s essential to understand the benefits and drawbacks of each before making a decision.
Big Banks vs. Independent Financial Advisors
Canada’s banks offer clients different levels of advice. The most common is the financial advisor at the branch. They help with day-to-day banking needs like bank accounts, borrowing, and investing.
Your bank may also offer the services of an investment advisor. Investment advisors look after the needs of customers with large portfolios to invest. They may do a retirement plan for you and tailor their investment advice to help you reach the goals of the plan they present.
The bank’s private wealth division is for clients who require a higher level of expertise because they have significant assets. These clients want estate planning, retirement planning, and tax advice. Wealth advisors may refer you to small business, commercial or insurance advisors who work for the bank if you need those services.
The benefits of dealing with a bank are:
- They can fulfill your banking and borrowing needs
- You can simplify your finances by keeping everything in one place
- Canadians trust their banks to take care of errors if things go wrong, like fraud
While banks offer convenience and a range of services, there are significant drawbacks to relying on them for financial advice, especially if your needs are complex. Before deciding, it’s essential to be aware of these issues, such as potential conflicts of interest and limited product offerings.
Conflict of interest- Bankers are salespeople with sales targets. They may steer you to products that aren’t right for you to meet their goals.
Lack of Credentials- Financial advisors at the branch may not have the necessary training, education, and experience to give you the advice you need.
Continuity- Staff changes occur frequently. You might find yourself explaining your circumstances repeatedly to new advisors.
Cost- A bank’s average annual cost of mutual funds can be 2% or more of your portfolio. If, for example, you have $250,000 invested in your bank’s mutual funds, your annual fee could be $5,000 or more.
Limited product offerings- The investments they offer at the branch are limited to their products.
Independent Financial Advisors
For personalized financial planning services, Ontario residents should consider meeting with an independent financial advisor. They offer financial plans tailored to your needs and often have expertise in other areas such as taxation, estate planning and insurance. The benefits of local financial planners are:
- Personal advice designed to help you achieve what’s important to you
- Access to a much broader range of investment products and services
- The fees are usually lower than those of a big bank
- Certified Financial Planners must meet educational and licensing standards
- The continuity of dealing with the same person who understands your life goals
Some things to consider before hiring an independent financial planner are:
- You typically must have a minimum amount of investible assets, such as $250,000, to get the maximum value from their services
- They may suggest you set up your banking services with other providers, which will benefit you in the long run, but may take some time to adjust to
How to decide between a bank and an independent financial planning firm
It’s not always easy to make decisions when dealing with money. People fear making a mistake that will harm their finances. Before making a decision, here are some questions to ask yourself:
- What level of advice do I need? A big bank could be the right choice if you’re a skilled investor, a financial expert, or have uncomplicated needs. If you want a detailed plan, need someone with in-depth expertise and want unbiased advice, independent financial planners offer the services and products you need.
- How much will they charge? Mutual funds offered by the banks typically have high costs. An additional 1% or 2% fee on a mutual fund versus other types of investments may not sound like a lot, but it adds up significantly over time. Find out the costs for your investments and the fee structure for your independent financial advisor. At MDL Financial, our fees typically begin at .65% of the value of your portfolio.
- What credentials does your advisor have? Knowledge is essential when dealing with finances, so knowing what credentials and licensing your bank advisor and financial planner have is crucial.
- What is the expected outcome of the plan? A financial plan isn’t a one-time activity; it should be treated as a living document. A good financial planner will conduct an annual review to assess your progress towards your goals. While advisors do not control the market, they should monitor the performance of your investments, revisit your assumptions, and adjust the strategy as necessary to help keep you on track.
- Are there testimonials from other clients? Finding reviews about the firm or advisor will help you determine if clients are satisfied with past service. At MDL Financial Group, for example, you can read testimonials from our clients like this one:
Seeking out the best financial advisor in Ottawa? Gabriel is not only a very talented financial planner but also exceptionally personable. He understands the ins and outs of all aspects of investing, markets, insurance, taxes, and so much more. In addition, he understands my individual needs and wants and provides sound recommendations at every turn. Trust in someone is the most important thing when it comes to my money. Gabriel has proven this time and time again that he is the right person.
Nicholas Morin, Electrical Engineer Studen
To find an independent financial advisor, Ottawa residents can ask for recommendations from friends or family or search online for reputable firms.
Independent Financial Advisors in Ottawa
Meeting with an independent advisor is your best choice if you have investible assets of $250,000 or more. You’ll get a comprehensive financial plan covering all aspects of your financial life, providing a clear roadmap for your financial future. This, coupled with a long-term relationship with an advisor who understands your unique circumstances, can give you the peace of mind you need.
Our advisors at MDL Financial Group have been serving the needs of Ottawa area residents for more than 30 years. We offer fee-only planning with a level of service typically reserved for clients of a bank’s private wealth division. We act as your personal Chief Financial Officer, coordinating all your financial needs, including retirement and estate planning, taxes, insurance, and accounting.
We believe in building lasting relationships with our clients, so you can be sure that we’ll be there for you every step of the way, providing the support and guidance you need to secure your financial future. Book an appointment online or call us today at 613-419-9649 to get started. We look forward to working with you!
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https://mdlfinancialgroup.ca/how-to-protect-your-estate/
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