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Inside the Market Recently divorced woman has $100,000 to invest in something secure

Ask financial planners about life’s top wealth destroyers and divorce is guaranteed to be mentioned.

So when someone comes out of a divorce with a chunk of money to invest, the process has to be handled carefully. You’ll see why in a question recently submitted by a reader: “I am a recently divorced woman aged 57. Working part time. Have some money to invest (about $100,000). Looking for something secure for my retirement. Any advice?”

Here’s some advice: See a financial planner. Find someone to talk to about where you are now, postdivorce, what your financial goals are and when you hope to reach them. This discussion will dictate what to do with the $100,000.

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Meantime, let’s look for clues in what this reader is asking. She mentions looking for something secure, a turn of phrase that suggests someone who doesn’t want to expose their money to stock market risk. That’s cool – a divorced person just starting to rebuild wealth and with few other assets should think about preserving that $100,000 rather than taking on risk to grow it substantially. This argues for a ladder of guaranteed investment certificates.

GIC rates have fallen a bit in recent weeks, but it’s still possible to get a blended rate of close to 3 per cent if you equally invest in terms of one through five years at an alternative bank or a credit union.

The fact that this reader is 57 and working part time suggests the $100,000 might have an important role in building future retirement income. There is still time for this person to save for retirement, but part-time work may limit the potential. Even a relatively conservative 50-50 portfolio of stocks and bonds can be expected to beat GIC rates on an average annual basis over a period of 10 years or longer.

Not a lot of investment advisers are going to spend time in depth with someone who has $100,000 to invest. A better fit would be a fee-for-service financial planner who gets paid on an hourly or flat rate basis and is willing to scale advice to accommodate a client's needs and budget. Here’s a Canada-wide directory of fee-for-service planners. Also check out the “find a planner” service on the Advice Only Planners website.

Note: These planners will typically discuss investing in in principal, but not recommend specific securities. A robo-adviser can work well to produce an investment portfolio based on your financial plan. Or, pick one of the new generation of balanced exchange-traded funds, each of them a fully diversified portfolio in a single convenient package.

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If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

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