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The 10 tasks of your financial advisor. #1: know your current situation and take stock

Simon Houle

Update :
Update :
October 10, 2017

This blog is the first in a series that Archer Wealth Management will be publishing during the fall of 2017 with the goal of helping you understand how your financial advisor works with you throughout your life to achieve your personal and financial goals. In this first issue:

  1. Establish your current situation and take stock

Establishing your current situation and taking stock is the first step in developing your financial plan. Many people tend to procrastinate and put this exercise off until later. However, it requires very little effort on your part - attending an information gathering meeting - since your advisor will do all the work, while you will benefit immediately and appreciably.

Your current situation

A financial advisor must know his client well. Not only is this a regulatory requirement, it is the foundation of the relationship. Your advisor can't help you determine your goals and develop a plan to achieve them if he or she doesn't really know you.

What exactly does it mean to "know your client well"? There is of course the basic information: age, marital status, employment status, income, children and other dependents. Your counsellor will also be interested in knowing if you have any support obligations and what your health status is.

If your situation is more complex - if you are an entrepreneur, self-employed professional or self-employed, for example - they will want to know how your business is structured. If applicable and desired, he or she will want to obtain the contact information of your other professional advisors (accountant/tax specialist, lawyer, notary) to coordinate your plan with them.

As discussed in future blogs, your advisor will consider your current situation, financial goals and investor profile - including your risk tolerance - when developing your investment policy.

Your balance sheet

Your balance sheet will give you a picture of your current financial situation. If your financial goals (retirement or otherwise) are a "destination", your balance sheet is the starting point for your journey. Like all balance sheets, yours includes assets as well as liabilities.

Your assets

Your assets include your chequing or savings account, TFSAs, RRSPs and other registered plans, non-registered investments, your employer's pension fund (if you have one), shares in a private company, the cash value of your life insurance policy, your home and other real estate, and your vehicles.

These assets will be used to fund the achievement of your goals. As we'll discuss in a future blog, it's your advisor's role to help you grow and protect these assets according to your goals and your investor profile.

Your liabilities

The liability portion of your balance sheet consists of your mortgage balance, car loan, personal loan and line of credit balance.

The preparation of your balance sheet is an opportunity to reconsider some of your financial behaviors, such as the use of credit as well as your consumption and savings habits. If necessary, we will proceed with an analysis of your income and expenses in order to identify opportunities for improvement.

Next blog

Having established your personal situation and taken stock, the next step is to determine your financial goals. This is the subject of our next blog.

To receive all the blogs in the "10 jobs for your financial advisor" series, subscribe to our newsletter.

Archer Wealth Management

Archer Wealth Management offers an alternative to large financial institutions and mutual funds. We are independent financial advisors and use an index-based approach to structure a diversified, customized portfolio that minimizes risk, costs and your tax bill. Archer is registered with the Autorité des marchés financiers.