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Financial planning
and advice

Discover the truth about these common financial planning myths

Myth #1. A tax refund is a good thing

While it might seem natural to be thrilled to receive a hefty tax refund, we explore the advantages of not getting a tax refund. 

Myth #2. A will is an estate plan

There’s much more to estate planning than making a will. Find out what it involves, including trusts, beneficiaries, charitable donations and tax efficiencies.

Myth #3. Always go fixed over variable

It’s a fallacy that a fixed mortgage is always a better option than variable. Discover the pros and cons of each and how to choose the best option for you.  

Myth #4. You need $1M to retire – and other retirement myths

How much you’ll need in retirement will depend on your personal circumstances. We explore this and four other retirement myths.

What is financial planning?

There’s no doubt that investing plays a key role in financial planning — after all, it allows you to save for major events and purchases and provides you with income in retirement.

However, there is far more to financial planning and wealth management than investing. A comprehensive financial plan will include all of these components:

  • Planning for a financially comfortable retirement.
  • Managing cash flow (including making a budget and reducing debt).
  • Sharing wealth (such as leaving a will and charitable giving).
  • Ensuring that you are prepared for the unexpected.
  • Saving for major expenditures.

This can all be accomplished — and in the most tax-efficient ways — with the help of a certified financial advisor. A strong financial plan will adapt and change with your life and therefore give you more financial confidence. 

What does a financial advisor do?

Solid financial planning requires highly qualified advice. While a key role of a financial advisor involves investment and wealth management, a good financial advisor will address all facets of financial planning, including:

  • Helping you to create, and stick to, a rigorous financial plan so that you reach all of your goals.
  • Putting in place a realistic budget.
  • Providing easy-to-follow advice for reducing your debt.
  • Helping you to retire when you want to retire.
  • Ensuring you and your family can overcome any unforeseen events.

There is still some misunderstanding and common myths surrounding financial planning. It’s crucial to understand exactly what a financial plan can do for you.  

How can a financial advisor help you?

A key role for any good financial advisor is to help you make better decisions and feel in control of your finances. Working with a financial advisor should make you feel confident that your financial plan addresses all of your needs.

Your advisor will get to know all about your current financial situation, as well as where you would like to be and all of your plans for the future. They’ll then recommend a financial plan that is custom made for you, along with how you can achieve it, together. That financial plan should go some way to making you wealthier, faster. According to Canadian research on investors with and without a financial advisor, over a 15-year period, investors with an advisor were, on average, 2.3 times wealthier than comparable investors who had no advisor.

Choosing a financial advisor

Finding the right financial advisor for your specific needs is essential. Typically, if you’re looking for an advisor who can provide you with a holistic financial plan, you will want either a Certified Financial Planner (CFP), a Registered Financial Planner (RFP) or, if you live in Quebec, a Financial Planner (F.Pl)/planificateur financier (Pl. Fin.).

To make sure you pick the right advisor for your needs, there are several important questions you should ask your prospective financial advisor before making your decision.

Working with an IG advisor

IG advisors help you with your financial planning by developing your custom-made, comprehensive IG Living Plan, which contains all six components of a truly holistic financial plan, as outlined in the financial advisor section above.

IG advisors are also able to lean on the expertise of a team of IG experts in the fields of tax, estate planning and retirement planning. This allows your IG advisor to provide in-depth advice, which is particularly helpful if you have complex needs in these areas.   

Contact an IG advisor today to arrange an initial conversation to find out how they could help you to take control of your entire financial life. You can find an advisor here.

FAQ

  • What is financial advice versus investment advice?

    Investment advice is far more limited, in that it only provides recommendations of the best investment options for your particular situation (which could be a portfolio of individual company shares, bonds, mutual funds, exchange-traded funds or a combination of them all).

    Financial advice will include all of the above, plus advice that will cover every aspect of your finances, including creating a financial plan, budgeting, cash-flow management, reducing debt, and saving for major purchases and retirement. It also includes ways to share your wealth, having a financial safety net (in the shape of an emergency fund, life insurance, etc.), and, for business owners, to align your personal finances wth your business finances. And fundamental to all of this advice is making your plan as tax efficient as possible.

  • Is financial advice worth it?

    According to Canadian research on investors with and without a financial advisor, over a 15-year period, investors with an advisor were on average 2.3 times wealthier than comparable investors who had no advisor. Therefore, even if you might have to pay fees for financial advice, you will still come out way ahead in the long run.

    The need for financial advice will, however, depend on your personal circumstances. It’s best suited to people who struggle to keep on top of their finances, have a considerable amount of investable money, have complicated tax or retirement planning needs, and/or don’t have the time, ability or inclination to make complex financial decisions. 

  • Who can provide financial advice?

    The ability to use the titles “financial planner” or “financial advisor” without a specific level of education, experience or membership of a governing body varies from province to province. Therefore, in theory, the standard of advice you’ll receive from a financial advisor could vary considerably.

    It therefore makes sense to deal with financial advisors or planners who have the Certified Financial Planner (CFP), Registered Financial Planner (RFP) or, in Quebec, Financial Planner (F.Pl.)/planificateur financier (Pl. Fin.) designations. These are professionals who have successfully completed financial planning courses and have a regulatory body. In addition, financial advisors who sell investments must be licensed either with the Mutual Fund Dealers Association of Canada (MFDA) or the Investment Industry Regulatory Organization of Canada (IIROC). 

  • How much does a financial advisor cost?
    This depends on the kind of financial advisor you work with and your unique needs. Fee-only advisors charge you directly for this service. This amount can be a flat fee, an hourly rate, a percentage of the assets managed, or a combination of all three. Other advisors are paid indirectly, through commission on financial products that they sell to you (such as mutual funds). You can find out about IG Wealth Management’s fees here. 

More on real financial planning

Retirement planning

Real retirement planning goes beyond RRSPs: it takes into account your lifestyle, retirement goals, expenses and all sources of income.

Learn more

Tax planning

Expert advice on how to maximize your tax deductions and credits, and minimize the taxes you have to pay on your income and investments.

Learn more

Home ownership planning

Our holistic approach to financial planning includes ensuring you have the right mortgage for your evolving needs.

Learn more

Estate planning

A comprehensive estate plan ensures that your money goes to your loved ones, as per your wishes, and in the most tax-efficient way possible .

Learn more

Getting started is easy

Here’s what to expect from your initial conversation with an IG advisor; they will: 

1

Understand what’s important to you: your values, concerns and goals.

2

Share our approach to financial planning, which goes beyond investments, to include tax efficient strategies, risk reduction and more.

3

Answer any questions you may have and establish our next steps.

Are you ready to connect with an IG advisor?
Let’s get started building your comprehensive financial plan today.
Find an advisor near you

Insurance products and services distributed through I.G. Insurance Services Inc. (in Québec, a Financial Services Firm). Insurance license sponsored by The Canada Life Assurance Company (outside of Quebec).

Mutual funds and investment products and services are offered through Investors Group Financial Services Inc. (in Québec, a Financial Services firm). Additional investment products and brokerage services are offered through Investors Group Securities Inc. (in Québec, a firm in Financial Planning). Investors Group Securities Inc. is a member of the Canadian Investor Protection Fund.Mortgages are offered through I.G. Investment Management, Ltd., registered as a mortgage brokerage in NB, ON (license no. 10809), NS (license no. 3000240) and as a financial services firm in QC (license no. 2400376104).


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