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Metaphorically Speaking (Posted On: Sunday, March 22, 2009)

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-- about professional financial advice.

Managing expenses is one of life’s little challenges with which most of us can use some help, but if you do not have a complete wealth management strategy it can easily be overlooked (see my reference to ‘fuel’ below). My title; ‘Investment Advisor’ might imply to you that my entire job is to make investment recommendations and then buy and sell stocks, bonds, mutual funds and other types of investment instruments on your behalf. While this is an essential part of an Investment Advisor’s responsibilities, recent years have seen those responsibilities expand dramatically.

My professional practice and that of increasing numbers of my colleagues focuses on total Wealth Management. This of course may raise the question “what does that mean?”

Wealth management refers to the design and construction of a complete financial plan and the process involved in reaching your goals. Investing strategically could be considered the engine that moves a financial plan forward; it is only one part of the wealth management ‘vehicle’ that gets us where we want to go. Let’s continue this metaphor. In this context, your wealth is about your financial success in whatever order of magnitude that may be. Please read on…

The first stage is planning and navigation; where do you want to go? – can you describe your retirement? - do you have succession plans for your family business? - do you want to transfer wealth to family or charity before or after you die? - when do you want to reach these decisions? What is the best route that fits your own set of circumstances? Are there mid-way destinations such as major purchases and other lifestyle goals, education funding, planning for contingencies? The answers to these and other questions should inspire the design of your vehicle and plot the road on which you and your family will travel into the future.

Just as planning for a trip takes shape as you make decisions about what you want to do and see along the way, so too does wealth management take shape as we add the elements that are built from your advisor’s toolkit of knowledge, experience and access to teams of expertise. You could think of the shape and style of the vehicle as the lifestyle you enjoy or want to enjoy. The suspension system (your advisor’s perspective) determines how well you and your family understand and absorb the road’s hill climbs, steep slopes and rough bumps created by the unpredictability of financial markets and the economic environment.  The transmission system (or drive train) is the responsiveness of your advisor and his/her organization which determines how efficiently the energy from the engine drives the wheels. The distance your wheels travel and the traction of your tires can be considered the measure of your vehicle’s success (progress reviews). Getting you to your destinations with the least amount of friction is a goal shared by you and your advisor.

And as with any trip along life’s highway, your progress needs to be checked constantly (reviews and communication), and adjustments need to be made; you are in the driver’s seat, but your wealth management advisor is a navigator to ensure your safe arrival, helping to anticipate the unexpected, listening and giving you the confidence that comes from knowing you have a plan and you’re on track.

Finally, the fuel to get you to your destination in life is really your cash savings. Aside from inheritances, lottery wins or other windfalls, you are responsible for earning it. Getting it into the tank often requires a little help and your advisor can develop strategies with you to maximize how much of your income turns into savings each month after expenses.

It’s your vehicle. Whether you need to complete building it, or you need to stop driving it alone, you may benefit by appointing a competent, professional navigator you can count on to be there for you. Your advisor should be someone you like, respect, trust and feel comfortable with -- someone you can confide in is the ultimate goal. A compatible relationship increases your likelihood of reaching your goals.

If you do not have an advisor or if you think your plan and/or your relationship could be improved, I encourage you to, at the very least; have an introductory meeting with one or more professionals whose style appeals to you.

Enjoying life’s journey is the ultimate goal!

Brian MacDonald, B.Math, is an Investment Advisor with BMO Nesbitt Burns in Collingwood, Ontario, 705-446-2114.  His background includes various executive and ownership roles in business prior to joining the financial services industry. He is an avid volunteer, including his membership in the Rotary Club of Collingwood – South Georgian Bay. Brian has learned that his business experience plus his real-life lessons in ‘dealing with the unexpected’ resulting from years of recovery from a near-fatal accident provides his clients with added value and perspective in making financial decisions. Living in Collingwood since 2002, Brian and his wife Nancy have four adult children.

® “BMO (M-bar roundel symbol)” is a registered trade-mark of Bank of Montreal, used under licence.
® “Nesbitt Burns” is a registered trade-mark of BMO Nesbitt Burns Corporation Limited, used under licence.

If you are already a client of BMO Nesbitt Burns, please contact your Investment Advisor for more information.

Opinions are those of the author and may not reflect those of BMO Nesbitt Burns.  The information and opinions contained herein have been compiled from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness.  BMO Nesbitt Burns Inc. is an indirect wholly-owned subsidiary of Bank of Montreal. Member CIPF.



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