Three Ways a Financial Professional Can Add Value

Based on an article from our U.S. partners – Getting help to invest, manage taxes, and protect your family may be worth the cost.

The financial world is complex–with myriad choices, complex terminology, and high stakes. Many people prefer a do-it‑yourself approach, but partnering with a financial professional has the potential to help. Of course, that guidance comes with a cost. Is it worth it? That is a personal decision that each individual needs to evaluate, but there are advantages to working with a financial professional.  “Having a strong relationship with a financial professional can be a huge benefit for individuals and the people they care about,” Steve Gresham, executive vice president in Fidelity’s Private Client Group. “A financial professional can help prevent you from being blindsided by risks, avoid making big mistakes, understand your options, confront realities about your financial situation, and make strong plans.”

Exhibit 1:  Where a financial professional can add value


1. Investment guidance

The nightly news will always include a mention of what the S&P 500 or Dow Jones indexes did. While these broad benchmarks have a role to play in evaluating investment returns, the truth is that most investors fall far short of “market” performance. Independent research firm DALBAR estimates that the average stock investor trails the stock market by nearly four percentage points annually, while Morningstar has estimated that mutual fund investors as a whole have trailed the average mutual fund by from 0.55% up to 2.5% a year, in recent years.¹  One key reason:  bad timing.

Investors as a whole tend to buy investments that have been rising and sell when they have been falling, as the emotions of fear and greed drive decisions. Unfortunately, these are often poorly timed decisions, and they end up resulting in underperformance.

Exhibit 2 Trying to time the market can cost you


Source: Investment Company Institute, 2015 Investment Company Fact Book. Past performance is not a guarantee of future results. These data show industry flows into the equity funds tracked by the Investment Company Institute, plotted as a six-month moving average. A six-month moving average means that each data point shows the average for the previous six months; for example, the data point for June 2015 shows the average for January–June 2015.  Total return is based on the MSCI All Country World Daily Total Return Index, a free-float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets.

A financial professional potentially can help you create and follow a disciplined investment process to avoid these emotional decisions. This includes an appropriate asset allocation to help you reach a particular goal. Research has shown that asset allocation is a key driver of portfolio returns. The choice of an appropriate asset allocation depends on your goal, time frame, situation, and risk tolerance. But it’s not easy to do. According to data from workplace savings plans that Fidelity administers in the U.S., only about half the investors who are doing it on their own have an asset allocation that is roughly on track.²

Having an appropriate investment mix is important when it comes to how much risk and volatility you can tolerate.  The key is to pick a portfolio mix you can stick with through market ups and downs.

“All of us experience similar feelings, but acting on our emotions may not always produce the best financial results,” says Joe Steeves, senior vice president in Fidelity’s private client group. “An experienced professional can offer a steadying hand during stressful times to help you stick to a plan that’s right for your situation and feelings about risk, and to navigate the markets to reach your goals.”

2. Navigating the tax rules

Taxes, and all the rules around taxes are complicated, but a financial professional may be able to help.

Just helping you to think through which of your investments should be held in which account can make a big difference.

Which investments are better suited for a TFSA and which for a RRSP? Because different types of investments are subject to different tax rules, and different types of accounts offer different tax benefits, coming up with a strategy for what to put where can potentially reduce the taxes you have to pay on your investments overall. These asset location decisions can be complex, but a financial professional may be able to help. 

A financial professional may also be able to help you manage the ongoing taxes from your investment portfolio, through investment selection and strategies like tax-loss harvesting – matching investment gains and losses.

3. Financial planning for life

Having a relationship with a financial professional also creates the opportunity for you to manage the risks and needs of your family as they change over time. This means everything from a plan for retirement saving to managing the financial impact of children and parents through different life stages, and protecting your own long-term financial goals from excessive risk.

A financial professional can help you manage the complexities of retirement savings and spending – choosing how much to save and in which accounts, and then how much to withdraw, and which investment alternatives and accounts should be used to help generate income.

A financial professional can also help keep your plan on track, by helping to manage changes in your life, and helping to navigate around major risks. This means helping you adjust your strategy to support your children – and your aging parents – through the different stages of life. It also means helping to protect your family from major risks. Health issues are a common cause of early retirement, and they can derail your plans. A financial professional can help you to create a plan to protect your loved ones.

A trusted financial professional can also help your family. In many families, a single individual is primarily responsible for investment decisions and managing money. But as you age, the risks of disability, impairment, and death rise. It may not be pleasant to consider, but who would help your spouse or children navigate your financial situation if you couldn’t?

Working with a trusted professional who understands your financial situation can help your loved ones manage that transition. A professional can also bring an impartial perspective to challenging family conversations, including who will make decisions and what will happen to your money after you are gone.

“Our research shows that seven in ten adult children believe it is important to know about their parents’ financial situation, and one in three feels he or she needs to know more,” says Steeves.³  “A financial professional can assist in these conversations and step in during the moments that matter, with the information and insight you and your family need to handle changes as you age.”

Exhibit 3 As parents age, adult children are more involved in finances.


Survey conducted by Fidelity in November 2015. See footnote 3 for details.

Staying on track

Creating a financial plan is an important step. But as your life and the markets change, your plan will need to adapt. A financial professional can help keep you on track.

For Canadian Investors
For Canadian prospects only. Offered in each province of Canada by Fidelity Investments Canada ULC in accordance with applicable securities laws.

Before investing, consider the funds’ investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the author and not necessarily those of Fidelity Investments or its affiliates.  Fidelity does not assume any duty to update any of the information.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

¹ DALBAR study: The results cited are from the 2015 Quantitative Analysis of Investor Behavior for investment performance from January 1, 1985, to December 31, 2014. DALBAR is an independent, Boston‑based financial research firm. Using monthly fund data supplied by the Investment Company Institute, QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. The Morningstar study: The 2014 and 2015 Mind the Gap studies compares asset-weighted 10-year investor returns with average 10‑year returns.

² Data as of December 31, 2015. Asset allocation based on equity holdings relative to Fidelity Freedom Fund using a 10% band and based on an assumed retirement age of 67. “All data based on Fidelity analysis of 22,000 corporate DC plans (including adviser-sold DC) and 13.6 million participants.

³ Survey based on 20-minute online interviews with a total of 1,043 adult children. Interviewing took place from October 14 to November 2, 2015. Adult children had to be at least 30 years old with a living parent who is at least 60 years old. The children’s parents also needed to have at least $500,000 in assets and be working with a financial adviser.

Indexes are unmanaged. It is not possible to invest directly in an index. The S&P 500 Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. 

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange or the Nasdaq.


London Health Sciences Cancer Care Campaign

40 Million Fund to Raise for London Health Sciences Cancer Care Campaign.

By Azam Abu-Saud


I would like to announce that I proudly accept the challenge of being a member of Cancer Campaign Cabinet Volunteer Leadership with London Health Sciences Foundation for a period of 3 Years.

The key roles of my duties to assist in raising an additional $18 Million to the other $22 Million raised to achieve total funds $40 Million. I will work strategically with key physician leaders to execute campaign strategies.

I am asking any of my friends, associates and clients who are interesting in supporting my responsibilities and interested in any kind of help to raise the funds needed to contact me and may join me on June 23, 2015 at Four Points Sheraton to view a presentation and learn about Cancer Program. Yesterday in my 2 tours to the London Health Sciences Centre. I learned how badly the program needs support.

The image of the Machine above RapidArc radiotherapy cost $4 Million.

Tel. (519) 432-8700

10 Financial Resolutions for 2016

Want to make new year’s resolutions? Here are some popular ones and ways to help stick to them. Fidelity Viewpoints – 12/29/2015 Want to make financial resolutions for the new year? It’s a great idea—and it can actually help you feel better about your finances. Our research shows just that. So what are you and your family resolving to do in 2016? Maybe it’s family related, like saving for your kid’s college education. Or maybe the volatile stock market in 2015 made you realize you need to pay a bit more attention to your investments, perhaps review what you own to make sure you have an appropriate mix of investments. Of course, making a resolution is one thing, keeping it is another. With that in mind, we created a simple interactive (right) and links to information and tools to help you make your resolutions come true. The 10 resolutions highlighted are those our customers said were their top resolutions for 2016.

Resolution #1:
Spend less. Everyone has monthly expenses—you need a place to live and to eat. But you may be able to reduce the costs—from refinancing to a lower mortgage rate to shopping around for lower-priced cell phone service or electricity, and stocking up on things you use often when they are on sale. Discretionary expenses—those “nice to haves”—likely provide an even bigger opportunity for savings. If spending less is your goal, take a look at how often you eat out and any impulse purchases. When you see how much they cost, it may provide the incentive to cut them out. Get started Learn: “50/15/5: a saving and spending rule of thumb.” Figure it out: Review your spending and saving with our Simple Budget Checkup. Stay on top of it: Track your spending and saving with Cinch (log in required).

Resolution #2:
Save more. Saving more is a close cousin to spending less. After getting a sense of your spending, you can begin to figure out how to increase your saving. A haphazard approach to saving will almost certainly produce haphazard results. The key is to create a savings plan that will help you stay disciplined when it comes to the amount you put away each month to meet your various savings goals. One of the simplest ways to ensure you save regularly is to make it automatic. That means scheduled, regular, automatic transfers into a savings or retirement account. If the money isn’t in your checking account, for instance, you are less likely to spend it frivolously. Get started Learn: “How to save money.” Figure it out: Use our savings planner. Stay on top of it: Track your spending and saving with Cinch (log in required).

Resolution #3:
Invest more. Have the 2015 markets tested your resolve? With pockets of volatility and big moves in certain markets, it makes sense to take a look at what you own. Your investment mix should have an appropriate level of risk and growth potential. If the market has shifted that mix, you may need to rebalance it. But don’t forget that giving your money a chance to grow is important. One of the best ways to do so over the long term is by investing in a mix of stocks and stock mutual funds and exchange-traded funds (ETFs). That means getting used to riding the ups and downs of the market. The investments you choose are just as important as how much you invest. A diversified portfolio that’s suited to your investing goals is essential. If you have a 401(k) or 403(b), your employer typically gives you a choice of mutual funds. You may be tempted to choose a conservative option, but if you have a long time until retirement and are comfortable with more risk, you can usually be more aggressive.
Not a hands-on investor? Consider what’s called a target date fund, if your employer offers one. The fund manager selects, monitors, and adjusts the mix to match a target retirement date. You choose the fund that matches the date you plan to retire. For a traditional IRA, you typically have more choices, including building your own mix of individual stocks and mutual funds. Again, if you don’t have the skill, will, or time to manage your investments yourself, consider a target date fund or managed account. Get started Learn: “Three reasons to invest in stocks.” Figure it out: Investing for growth. Stay on top of it: Review your investment mix in our Planning & Guidance Center (log in required).

Resolution #4:
Pay down debt. Student loans, credit-card balances, car loans, and mortgages— you probably have a variety of debt, as most people do. And the monthly payments can take a big bite out of your income. The key is to pay down the debt with the highest interest rate first, which is usually high interest rate credit cards. Consider paying more than the minimum each month. Check your credit card statement to see how long it will take you to pay off the balance—and how much it will cost. The statement usually suggests how much you need to pay each month to pay it off completely. Get started Learn: “How to pay off debt—and save too.” Learn: “Four ways to get out of credit card debt.” Figure it out: Map out paying off a credit card balance with our Savings Planner. Stay on top of it: Check your credit card balances every month.

Resolution #5:
Set aside money for an emergency. Managing your money would be much easier if life went exactly as planned, but it seldom does. That’s why an emergency fund is essential for dealing with everything from a blown transmission to a lost job. Fidelity recommends a cash reserve sufficient to cover three to six months of expenses. Get started Learn: “How to save for an emergency.” Figure it out: See how much to have in an emergency fund with our Simple Budget Checkup. Stay on top of it: Check your emergency fund balance every month.

Resolution #6:
Have a budget and stick to it. Trying to navigate your financial life without a budget is like trying to drive a car without a gas gauge and odometer. You’ll never know if you can make it to the next fill-up without running out. The good news is that you don’t have to micromanage
every penny. Analyzing your current spending and saving based on our three categories—essential spending, retirement savings, and short-term savings—can give you control and, perhaps as important, confidence. Undoubtedly, your financial situation will change over time. A budget is essential for both spending and saving. Once you know where your money is going, you can make an informed decision about how to allocate it. Get started Learn: “50/15/5: a saving and spending rule of thumb.” Figure it out: Review your spending/saving with our Simple Budget Checkup. Stay on top of it: Track your spending and saving with Cinch (log in required).

Resolution #7:
Save more for retirement. Who doesn’t have a retirement dream—a someday? It may be as simple as sleeping late or riding your bike on a sunny afternoon, or as daring as jumping out of a plane at age 90. Living your someday the way you want means having a road map now. Our rule of thumb: Aim to save at least 15% of your pretax income each year, from age 25 to age 67. It should help ensure that you have enough income to maintain your current lifestyle in retirement. One way to do that is to make the most of tax-advantaged savings accounts like 401(k)s and IRAs, and grab your employer match, if you have one, for your workplace retirement account. With a traditional 401(k), your contributions are made before tax, reducing your current taxable income, and the money can grow tax free until withdrawal. With a Roth 401(k) your contributions are after tax, but the money can grow tax free and be withdrawn tax free at retirement.1 While 15% may seem like a lot, if you have a 401(k) or other workplace retirement account with an employer match or profit sharing, it counts toward your annual savings. If you’re not there yet, try to increase your savings each year until you get to 15%. Upping your saving just 1% may seem small, but after 20 or 30 years it can make a big difference in your total savings. Get started Learn: “Three keys to retirement savings.” Figure it out and stay on top of it: Use our Planning & Guidance Center (log in required).

Resolution #8:
Buy a home. Are you thinking about buying your first home? Before making a purchase, make sure you carefully consider all the factors surrounding your decision. It’s important to take a step back and evaluate how much you can comfortably afford. Figuring out how owning a home fits into your budget can help you avoid pitfalls. Get started Learn: “How much house can you afford?” and “Buy a home or rent?” Figure it out: Calculate how much house you can afford.

Resolution #9:
Save for your kid’s college. Studies have shown consistently that a college education pays off in the long run for most people. College graduates earn higher salaries and experience lower levels of unemployment. But college is expensive, averaging $19,548 for a public college and $43,921 for a private institution, according to the College Board Trends in College Pricing 2015. So the earlier you start saving the better. Make the most of tax-advantaged accounts, like 529 plans, which let your money grow tax free. It makes a bigger difference than you might think. That’s because you’re leveraging the potential power of tax-free compounding. And while many families worry that saving for college will hurt their chances of receiving financial aid, 529 college savings plan assets are considered parental assets. Because of this they have a low impact on financial aid. Get started Learn: “Are you saving enough for college?” Figure it out: Decide which college savings option is right for you. Stay on top of it: Set up automatic contributions to a 529 college savings account.

Resolution #10:
Learn more about finances. Getting in good financial shape can pay off. Spending wisely, saving what you can, managing debt, paying bills on time, investing, and having some money tucked away can make you feel good. And knowing where your money is going may mean more money for you to enjoy the things that are really important to you. You want to feel good about your money no matter where you are in life—whether you are saving for your first home, sending your firstborn to college, or planning for longer-term goals, like retirement. Before investing in any mutual fund or exchange-traded fund, you should consider its investment objective, risks, charges, and expenses. Contact Fidelity for a prospectus, offering circular, or, if available, a summary prospectus containing this information. Read it carefully. Diversification does not ensure a profit or guarantee against loss. Investing involves risk, including risk of loss. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Target date options are designed for investors expecting to retire around the year indicated in the fund name. The investment risk of the target date options changes over time as its asset allocation changes. They are subject to the volatility of the financial markets including equity and fixed income investments in the US and abroad and may be subject to risks associated with investing in high yield, small cap and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. 1. A distribution from a Roth 401(k) is tax free and penalty free, provided the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, disability, or death. Votes are submitted voluntarily by individuals and reflect their own opinion of the article’s helpfulness. A percentage value for helpfulness will display once a sufficient number of votes have been submitted. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 744261.1.2