Weekend Reading: Advice-Only Planning Edition

It has been more than 10 years since I started offering financial planning advice – and more than five years since I quit my day job to work as an advice-only planner full-time.

I have a soft spot for who I call regular Canadians with regular problems. That’s the majority of you who read this blog – typically you’re T4 salaried employees, some with pensions, others with employer-matching savings plans, and many more just doing their best to balance living for today with saving for the future.

This is the mass market – one that has struggled to access quality financial advice over the years. You’re working with a bank-branch or investment firm advisor selling high fee mutual funds, or got roped into a financial MLM’s insurance-based investment scheme by a friend or relative. Worse (maybe), you’re just going it alone and following tips from your favourite finfluencer(s) online.

These folks need good financial advice at certain ages and stages of life, whether they’re starting a family, buying a home, changing careers, receiving an inheritance, or gearing up for retirement.

And while there are some fabulous financial advisors in Canada, most of them aren’t tripping over themselves to work with the mass market. Instead, the best of the best are working with high or ultra-high net worth clients.

Cool.

Imagine the time and resources spent on scenario planning for the 0.13% who might have been affected by the now (likely) dead increase to the capital gains inclusion rate. Not my idea of fun.

Advice-only planning, at least my version of it, aims to help the mass market and give them a fighting chance to survive in an increasingly complex financial world.

I’ve written an astonishing number of financial plans over the past three years (451 to be exact). 

But I’m only one person and the mass market is, by definition, massive. And not everyone has the means to pay for advice, or is not yet at a stage where a financial planning engagement makes sense. That’s where this blog comes into play. There’s a good 12,000 of you who subscribe and read regularly, and tens of thousands more who poke your head in from time-to-time.

Last weekend I was busy with kids’ activities and didn’t get around to writing a Weekend Reading update. That was a mistake, because many of you were busy freaking out over the threat of tariffs and wondering if you should hit the panic button and sell before the market opened Monday.

Indeed, I received at least a half dozen emails from concerned readers about exactly that.

So I quickly took to social media to put out a Keep Calm and Carry On message:

Markets have been through a lot in the past hundred years (heck, in the past five years) and continue marching on over the long term.

Unless you got way over your skis (leverage, too much risk, too concentrated) then just stick to your sensible, low cost, globally diversified strategy.

— Robb Engen (@boomerandecho.bsky.social) 3 February 2025 at 06:53

Meanwhile, I try to train my clients to be emotionless robots when it comes to investing, but it’s easier said than done when everything feels scary and uncertain:

Hi Robb, while I do tend to err on the emotionless robot side when it comes to investing, there has been so much talk about these tariffs and I wonder if this is a situation when we would want to make some changes in investment strategy, allocation etc.

I’m guessing you’ll say don’t change anything, same as always but wanted to ask regardless haha.

and:

Hey Robb,

I’ve never seen a trade war before but I can’t imagine this is good for the markets. I’m assuming your recommendation is to just keep investing with the dollar cost averaging mentality?

Notice how they both knew what I was going to say, but I think they just needed to hear me say it again this time?

Finally, my absolute favourite message was from another client (who’s friends with another client):

I was freaking out last weekend with all the crazy stuff about tariffs. I did not do a thing. And you were right! 

I almost emailed you, but I talked to (other client / friend) and she said, “do not bother Robb – he has taught us.”

I love it.

So what exactly is a regular Canadian with regular problems?

My ideal client is an individual or couple who is 3-5 years away from retirement and looking for a roadmap. They want to know if they can retire at their desired date, how much they can safely spend, and ultimately if they’re going to be okay. 

They want to know if they’re paying too much in fees in a managed portfolio, or if their self-directed portfolio is appropriately allocated.

They want to know if they can travel more, or help their children get through post-secondary and/or buy a house one day.

That’s my wheelhouse. But I also have many clients in their 30s and 40s who want guidance on how to maximize their life enjoyment now while also saving for the future. I have many clients who are already retired and want a tax efficient withdrawal of their resources. And I have an increasing number of clients who are dealing with an influx of money from an inheritance, settlement, or insurance pay out.

Okay, so who is NOT a regular Canadian with regular problems? Well, let’s say you own a business (not a sole proprietorship or a “freelance” business like mine, but something more complicated with employees and widgets, or other business partners), or you’re a US citizen, or you plan on leaving Canada or retiring outside of Canada, you receive regular stock options or other equity based compensation, or you own multiple rental properties (or foreign properties), to name a few.

Complexities like that deserve more time and expertise than I can offer. When I receive requests from folks with those issues, I typically refer them to other rockstar advice-only planning firms such as Spring Planning, Objective Financial Partners, or Modern Cents.

There are others, but in general I’ve found that more and more financial planners have co-opted the advice-only planning label but also offer investment management for a percentage fee.

I believe true advice-only planning separates advice from product sales. That’s just me. The trade-off, and a frustrating aspect of advice-only planning, is that I’m just giving advice. It’s up to my clients to accept and implement that advice.

Which leads me back to my point about keeping the blog up-to-date. If you’re a client, you should be following the blog and subscribing to email updates. When I publish something, I’m speaking to you (and many more like you) about good financial decision making and (hopefully) reinforcing the more specific advice I have given you.

Next weekend we’re heading to Cancun to escape this never ending winter freeze. Meanwhile the RRSP deadline is fast approaching. To head-off dozens of emails about RRSP contributions, I should probably publish a quick blog post explaining how to think about optimizing your RRSP contribution for the 2024 tax year.

This Week’s Recap:

In my last post I opened up the money bag to answer reader questions about investment loans, optimizing your RRSP, underspending in retirement, and more.

Prior to that I wrote about putting your retirement income puzzle pieces together.

And my last Weekend Reading looked at the power of simplifying your finances.

Promo of the Week:

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The match bonus will be applied as 24 equal monthly payments to your Wealthsimple Cash within 60 days after the full net funding amount has settled.

Open your Wealthsimple account here, and then register for the Big Winter Bundle promotion to get yourself some cash back.

I’ve helped hundreds of clients and readers set-up their own self-directed investing accounts and start investing with a single, risk appropriate asset allocation ETF. You can do this!

Weekend Reading:

YCharts is debunking investing myths such as “investing is like gambling”.

Financial planner Markus Muhs looks at true long-term investing and why recent returns can be misleading.

On a similar note, Dan Hallett says if you’re piling into US stocks don’t expect the past decade to repeat.

Mark Walhout takes a thorough look at the health conditions that may necessitate a stay in long term care, the different types and levels of long-term care support in Canada and their associated costs, and how retirees should be planning for the potential costs and lifestyle impact that a move to long-term care will bring:

Fred Vettese looks at whether minimum RRIF withdrawal rates are too high (G&M subs):

There’s indeed an argument if returns are too low (or the portfolio is invested too conservatively) and the retiree has a long life expectancy.

Finally, a double-shot from A Wealth of Common Sense blogger Ben Carlson. First he describes the perfect level of wealth.

Next, does buying the dip actually work? In theory, yes. But not so much in practice.

Have a great weekend, everyone!