Are financial advisory services a necessity?

Financial advisory services are offered by many types of financial professionals, such as mutual fund advisors, financial planners and portfolio managers.

Depending on their role, their mission is to offer financial products adapted to your financial and tax situation and help to protect you from yourself and the fluctuations of the market. Such investment management support can pay off handsomely in the long run.

Can you really dispense with it?

While it’s true that you can buy stocks and mutual funds with just a few clicks, that doesn’t mean it’s a snap. Do you really know what you’re investing in, and are you sure your choices are aligned with your financial goals?

A mutual fund representative can help you select investments on the basis of your investor profile, financial goals and financial reality, explain the products available and confirm their suitability as well as answer your questions.

The mutual fund representative's expertise

• Identifying your investor profile
• Guidance to achieve your goals
• Investment account taxation
• Investment selection
• Investment and savings strategy

In the case of a financial planner, the advice goes beyond selection of investment products. A financial planner has expertise in all facets of personal finance and can quantify the impacts of your decisions on each of them.

This becomes especially clear when you get ready to make withdrawals – a key aspect of investment. After all, the goal of investing is to cash out! Do you have the tax knowledge to make optimal withdrawals? A financial planner can advise you on how to reduce your taxes, increase your wealth over the long term and ultimately optimize your estate planning.

The financial planner's expertise

• Investment
• Retirement
• Taxation
• Insurance
• Estate planning
• Debt management
• Personal legal issues

In a bull market, when your investments are rising steadily, managing your own investments can be a pleasure. But what if the market turns volatile? Will you be able to make rational decisions?

Numerous behavioral finance studies show that we’re all susceptible to behavioral biases. Investors aren’t immune to cognitive errors, such as erroneous reasoning that seems logical and decisions driven by emotion. This is especially true in times of instability.

Risk aversion, mental accounting and anchoring on unfounded information are among the main behavioral biases that investors experience. And if you rack up some good moves while investing on your own, you risk falling prey to overconfidence – an emotional bias that could cost you dearly!

Mutual fund representatives, as well as financial planners, are well aware of these risks and can provide guidance to ensure your decisions are as rational as possible and reflect your investor profile. Moreover, if you invest in mutual funds, you have a portfolio manager working behind the scenes for you.

The rising popularity of discount brokerage apps and index ETFs also contributes to the belief that advice isn’t necessary. While brokerage apps allow you to buy and sell on your own, index ETFs simply replicate stock indexes. Both options reduce fees by eliminating or reducing the cost of financial advisory services. But is discarding valuable advices a good idea?

Portfolio managers conduct rigorous analyses of companies and the business environment where they operate to put together a diversified portfolio that takes long-term risk and return into account. This work done by professionals saves you time and energy, and can prevent you from making misguided investment decisions.

Engineering professionals and their families are fortunate to have FÉRIQUE Investment Services to help them achieve financial independence. Thanks to the Advisory Services team, you’re only a phone call away from getting support.

In addition, because FÉRIQUE Investment Services is the principal distributor of the FÉRIQUE Funds, you have access to a diversified range of mutual funds and portfolios whose management expense ratios are among the lowest in the Canadian industry¹. FÉRIQUE Fund brings together the best of both worlds: active management by seasoned portfolio managers and competitive management fees thanks to its NPO model.