Financial advisor  

Financial advisors have played a central role in the financial planning industry for decades, helping people (mostly the wealthy) to manage their money over time.

Financial advisors are typically paid a commission based on their Assets Under Management , or AUM. In other words, how much money you place with them. In one sense, this aligns your incentives with your advisor (“the more money you make, the more money I make!”), but when you break down the cost of having your money managed by a person in comparison to the value you’re receiving, it quickly becomes a pretty raw deal.”

Financial advisors typically charge anywhere between .50% to 1.50% of all your money each year. That may not sound like a ton, until you start to imagine hitting retirement with a $1 million portfolio and realizing you’re paying $10,000 every year or more to your advisor. Who’s retirement are we saving for here? And what are they doing for you in exchange for these vast sums of money? Maybe a few hours of actual labour at the end of the day.

On top of that, many advisors will put you into mutual funds and other products that charge an additional 1%, 2% or even 3% every year. These fees used to be quite hidden until legislation that came into effect in 2017 forced advisors to spell out their fees on your annual statement (you should have a look).

All together, a typical middle-class Canadian household could easily pay hundreds of thousands of dollar in fees to their advisor and to mutual companies over a lifetime. That’s money that we believe would best be kept in your own pocket.


Financial plan  

A financial plan is exactly what it sounds like – a plan for your finances. Building a true financial plan typically involves evaluating your current financial situation (things like how much you make and how much you’re spending) and then developing a strategy for your future based on your personal goals and stage in life.

Many people, especially those just beginning to focus on personal finance, find the idea of building a financial plan overwhelming. You might be thinking, “Where do I even begin? Do I even need a financial plan?”

The short answer is – yes.

Building a financial plan makes it far easier to reach your short and long-term financial goals because you have clear and measurable targets to reach. For example, if you’re looking to purchase a new house within the next two years, you can research how much you need to save each month for a down payment. Without understanding how much your dream home will cost and setting a time-bound goal, it would be next to impossible to build an appropriate savings strategy.
What else should I know?

If you decide to move forward with creating a financial plan (you should!) you may be surprised by how emotional the planning process can be at first. After all, building a plan requires confronting every aspect of your financial life – even past decisions you may now regret.

Don’t let these negative emotions deter you!

By working with Planswell, we blend technology with financial experts that get to know you and your specific goals. We work them into a coherent and flexible document that adapts to your life over time.


Goal-based planning  

Often when we think of financial planning, the first thing that comes to mind is planning for retirement. But what about all of the other critical financial decisions we make and goals we set for ourselves long before we reach retirement age?

The purpose of goal-based planning is to focus not only on retirement but on reaching all of these other goals – from buying a house, to owning a boat to going on a year-long adventure around the world!

Goal-based planning tends to be more personal and customized. Everyone will eventually need to care for themselves in old age, but not everyone has dreams of buying a vacation home in the Italian Riviera!

What else should I know?

When working with Planswell, our PlanPros are able to put together plans that include both long- and short-term goals, so you’re able to maintain your lifestyle in the future and also save for any monumental purchases you might have in mind.



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