For Tahnya Kristina (a pseudonym), managing affluent clients for a six-figure salary by age 25, sounded pretty good.
She was an adviser for a Montreal bank, and a CFP of four years. However, when it came to her own money, her management skills went out the window. She found herself with no savings, zero assets and more than $50,000 in debt.
Maintaining a lavish lifestyle and accrued student-loan debt was a part of the problem. Amid the bad spending habits, she says, there were some ill-considered work-related expenses. As a wealth adviser, there was a need to project affluence – by joining a golf club, buying an expensive watch and wardrobe.
“We were told to be at events and to go to golf clubs… and after you play golf you have to take a shower and then have an expensive dinner,” she adds. “It was awful.”
She says that when the market tanked in 2008 and commissions dried up, she considered personal bankruptcy.
There was another option though, that Kristina says more advisers need to consider.
“For financial advisers, if you are too busy to manage your own money then somebody should be doing it; if you don’t have the time to manage your own money, or you don’t want to do it, you should have an adviser,” she says.
“I’ve seen financial advisers who have $30,000-$40,000 in cash in a bank account. If they saw a client who did that they would never let that happen. But because they are too busy, or they don’t want to make a decision, or who knows what reason, they end up making mistakes with their own money.”
John Cachia, senior financial adviser for the Australian Financial Advisers Group, works with Gen Y clients like Kristina, who sometimes get themselves into debt that can seem never-ending. But after 12-18 months with an adviser, they will be out of that debt and saving for a holiday.
Cachia doesn’t have an adviser himself, but says it could be a good idea.
“It’s like that saying about the leaky pipe, you always leave your own till last.”
Koel Loyer, associate portfolio manager and senior associate with Stonegate Private Counsel in Toronto, tries to have things both ways: he manages his own portfolio but meets regularly with his partner where they reciprocally review each other’s investments.
“I manage my own portfolio, as does [my partner], but we’re fortunate as we’re a two-person team so we review our portfolios with each other so that we’re able to get each other’s take and opinion,” he says. “It’s like the best of both worlds: I’m managing my own but every six months I sit down with Joanne and review my stuff, and on hers we meet on it quarterly.”
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