Our last article outlined some of the key differences between managed portfolios and online or discount investment services, particularly with respect to fees and performance.
And while investment performance is extremely important, today I want to get into what else generates value and supports long-term net worth growth for clients like you.
Cost efficiency can be an extremely valuable quality in an investment portfolio. But when it’s deployed in tandem with a financial plan and long-term strategy, investors can do even more to pursue long-term net worth growth.
That’s because your wealth is more than just a portfolio or a balance sheet. It’s deeply intertwined with your life, and having a planning-based approach can help you address some of the biggest factors affecting your long-term financial health, such as:
Investor Behaviour: Factors like panic, loss aversion and narrative pressure lead the average individual investor to trail major passive indexes (let alone well-managed portfolios). DALBAR’s 2024 study measured this gap at about 4 points a year. A strict investment discipline negates much of this risk.
Tax: Savings, liquidity, drawdowns and cash flow all come with complex tax implications. With a strategic plan in place, you can navigate them to your advantage and avoid unexpected losses down the road.
Life Events: With preparation and planning, you can mitigate risks and maximize gains in the wake of both unexpected events (like illness or family shifts) and anticipated ones (like retiring or selling a business).
Being part of an all-inclusive wealth management platform means that you gain this guidance and service without added cost. And the value of this approach is routinely supported by industry research. In a 2016 study, the Centre for Interuniversity Research and Analysis of Organizations found that, even after fees, investors who partnered with an advisor for up to 15 years were four times wealthier than those who did not.
If you’re curious about what you have access to as a client of the Wilson Financial Team, or if you’d like more information on any of the insights we’ve shared here, feel free to reach out to me directly.
Jim Wilson, B.Comm., CFP®
Senior Wealth Advisor
jim.wilson@iaprivatewealth.ca | Tel. (289) 644-1476
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