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Shannon Lee Simmons, founder and certified financial planner at The New School of Finance in Toronto, signed her latest book deal in March 2020, specifically the day Ontario schools and businesses shut down.
Her latest book, No-Regret Decisions: Making Good Choices During Difficult Times, released in January turned out to be a crystal ball choice of topic.
Globe Advisor spoke with Ms. Simmons recently about the book’s themes.
Who is No-Regret Decisions for?
The focus is on people for whom something has happened or is about to happen and they’re faced with a massive decision or set of decisions that will fundamentally shift their day-to-day life on the other side – like losing a job or divorce.
People make decisions and sometimes things work out the way that they want. But if things didn’t work out on the other side of those decisions, you want to be able to look back and say, ‘I made the best decision based on the information at the time. Even though I don’t like the outcome, it was still a good decision.’
Those who look back and blame themselves for a bad decision are the ones who often struggle to feel hope. That can lead to anxiety because they don’t actually trust their ability to make good decisions when the financial stakes are high because they think they failed before.
I wanted to create a playbook that I could run with every client, regardless of the situation. The big thing is making sure people aren’t making panic-based decisions. Then, to help make decisions, we look at their deciding values and make sure they’re making the right choice for them.
Does the average advisor make the time to help a client facing a life hardship?
Advisors who do holistic planning have the flexibility to provide this type of value to the client and, sometimes, that would mean spending time asking the right questions to make sure this person is executing some kind of plan.
A lot of my firm’s financial planners are life coaches first and financial planners second. But so many of the decisions we make around money have high emotional stakes and uncertain outcomes.
Advisors can really lean on their skills to provide value by making sure that people who are coming to them with these high-stakes decisions engage with short-term time horizons. Also, they can make sure that the decisions are values-based and not reactionary-based, which would create a panic-based decision.
You frequently talk about short-term planning in the book. Does there need to be more of that in the industry?
Yes. My firm does a lot of hyper-focused, short-term planning for our clients.
The analogy I use is doing a road trip from St. John’s to Victoria. You draw a line across the map and that’s where you’re going. But what if your car breaks down in Ontario? What we do is get you through each problem because it’s a little bit more predictable.
This interview has been edited and condensed.
- Deanne Gage, Globe Advisor Reporter
Must-reads from Globe Advisor this week
How to strategize RRIF withdrawals when markets are down
Mandatory annual withdrawals from registered retirement income funds (RRIF) in a down market can be tricky, but with some planning, clients can ease through without issue. Having a dedicated amount of cash holdings in a RRIF portfolio can prevent clients from having to collapse investments, while the sooner clients can withdraw from the RRIF, the less they will be required to withdraw later on, advisors say. Deanne Gage reports on strategies\ advisors are using to help clients mitigate down markets.
Big Three grocers have new appeal in recessionary environment
While shoppers are feeling the pinch with their weekly grocery bills, shareholders of the Big Three publicly traded supermarket chains are feeling quite full and more than satisfied by their recent returns. In the three years since the end of January 2020, when the pandemic began, Loblaw Co. Ltd. L-T, Metro Inc. MRU-T and Empire Co. Ltd., EMP-A-T have been behaving like anything but the slow growth, low-margin businesses they have been historically. However, with rising interest rates squeezing disposable income, shoppers are looking around. Adam Mayers reports on how that plays to other strengths of the big grocery giants.
Why the ETF industry is unlikely to give up ground during a downturn
Ongoing market volatility and fears of a prolonged economic downturn could limit the rapid growth of exchange-traded funds (ETFs) this year. However, experts believe the ETF sector will be nimble by continuing to slash costs, cut product fees and provide more market-relevant products to attract and retain investors. HISA ETFs, also known as cash ETFs, are expected to remain popular alongside other fixed-income and alternative asset products aimed at reducing investment risk. Brenda Bouw gives an outlook for the sector.
Five steps to help clients when they lose their job
Recessions and pressures on businesses leading up to them have led to widespread job losses in the past. Although Bank of Canada governor Tiff Macklem has gone on record saying he doesn’t think unemployment will reach the high levels of previous recessions, it makes sense for advisors to be prepared to guide clients who are let go in the coming months. No matter how long someone has been in the workforce, advisors need to get a sense of clients’ concerns before educating them on opportunities and potential paths forward. Alison MacAlpine looks at five steps that can be taken after a job loss.
Here’s what to consider when making a will to avoid family disputes
Why this money manager took advantage of tech sector’s big drop to increase holdings in software firm
Why retirement has made this 68-year-old appreciate the importance of living for today
‘Colossal’ central bank buying drives gold demand to decade high
Crypto ETFs roar into life with eye-popping 2023 returns
What you and your clients need to know
Canaccord’s Canadian wealth arm acquires more assets amid capital markets downturn
Canaccord Genuity Group Inc. is adding $1.5-billion in client assets to its Canadian wealth management division with the purchase of Mercer Global Investments Canada Ltd.’s private wealth business. The deal – which is subject to regulatory approval and is expected to close within the next three months – will bolster Canaccord Genuity Wealth Management’s existing $88.6-billion in total assets, the majority of which are in Britain. The purchase price was not disclosed. The deal will include “partners and employees” of Mercer Private Wealth, the company said in a news release, as well as Mercer’s investment professionals in Winnipeg, Montreal, Toronto and Edmonton. Clare O’Hara reports on the deal.
Get your head straight about the financial side of home ownership
One by one, the myths of houses as magical financial assets are being blown apart. Correction-proof? Nope. A surefire wealth builder, even if you pay top dollar? Wince. A hedge against inflation? Uh, inflation is high and home prices are falling. Owning a home over a lifetime is a good thing to do for your finances – and for lifestyle reasons. But houses aren’t special. Like any other financial asset, they can turn sour for a time. Rob Carrick looks at how investors can better understand home ownership myths.
Mishandling a layoff can be a costly mistake. Here’s what employers must consider first
Eyebrows were raised recently when Elon Musk issued an ultimatum to Twitter Inc. employees that they either commit to working long hours at high intensity or leave with a few months’ severance. These workers were only given a few days to respond. This raises the question of how should employers behave when letting go of workers and what penalties exist for doing so unfairly? The Supreme Court of Canada has declared there is a legal duty for employers to behave in “good faith” at the time of termination. Broadly put, employers must not be unduly insensitive or unreasonable. Daniel Lublin reports on what the duty of good faith requires and what happens if an employer crosses the line.
– Globe Advisor Staff