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Pattie Lovett-Reid

Chief Financial Commentator, CTV


The end of the year is fast-approaching and no one likes to think about financial planning during the holiday season. 

That’s why fall is a great time to sit down with your financial advisor, so you can hit the ground running in 2018 with a plan in place and know exactly where you stand financially.

5 key priorities you may want to consider:

1. How has my portfolio performed? A recent survey by Natixis Global Asset Management Canada found investors were expecting a 9.8 per cent rate of return over inflation. Outrageous? Yes. Advisors in the same survey felt they could generate a return of 4.8 per cent. That is a serious disconnect and needs to be addressed. It is fair to determine what your performance net of fees has been so far this year. What isn't fair is to have said you are a conservative investor with a low tolerance for risk at the beginning of the year and then wonder why your performance expectations aren't being met. Be clear and reasonable on your portfolio's expected rate of return given your time horizon and tolerance for risk. 

2. Costs will erode your performance returns. Regardless of how your advisor charges you, you will be paying fees, whether it’s a flat fee, percentage of the assets, trading costs,  or account maintenance fees. It all adds up and it is important to understand what your all-in-costs are.

3. Am I on track to meet my goals? If not, why not? And what sort of changes need to be made? Do I need to save more, spend less, seek out a better rate of return, explore options to make more money or possibly change my time horizon? Our plans need to be quantifiable, reasonable and time-sensitive. Goals need to be specific and not nebulous. For example: “I need ‘X’ amount of dollars for retirement by a specific date.” As opposed to: “I'm saving for retirement.”

4. What is my net worth? Even if it is a back of the envelop calculation listing your assets and subtracting your liabilities will give you a very good idea where you stand. You could surprise yourself and find you are wealthier than you thought. It could identify weakness in your plan requiring corrective action (expensive debt adding up) or even force you to get more goal focused in 2018. In a perfect word, you will witness your net worth growing year-over year.

5. Carefully consider life changes. Whether it’s the birth of a child, marriage, job change, or big purchases, life changes need to be carefully considered in order to readjust a your financial plan. Are any changes to your plan necessary? Why or why not? It is important to remain disciplined and stay the course if your plan is working. Not changing anything is a decision in itself and may be the best option for you, depending on your circumstances.