Why one advisor is better for your investments and insurance

Managing your finances can feel like a complex juggling act. You likely have different products, accounts, and advisors all vying for your attention. Having a single advisor to coordinate your investments, insurance, retirement planning, and other needs can simplify what can feel like an overwhelming process. This article explores the key benefits of working with a single advisor.

4 reasons to have one advisor for your financial needs

Working with an advisor who specializes in holistic planning means you get access to their knowledge and skills. Advisors stay up to date on changing financial regulations, products, and best practices. By working with one person, you can build a long-term relationship. This helps build trust and understanding, which is invaluable when making complex decisions.

Here are a few more reasons to consolidate your advice with one advisor:

1. Simplify your financial life

Having a single point of contact to handle your investments, insurance policies, retirement planning and other financial needs can help simplify what is often a complex part of life. An advisor can act as your quarterback, coordinating different aspects of your finances. They can help ensure everything works together as part of your financial roadmap.

2. Get holistic advice and recommendations

When one advisor is looking at all areas of your financial life, they can provide advice that takes your entire financial picture into account. For example, different investments and insurance products may affect one another. A single advisor can help ensure everything fits together as part of an overall strategy tailored for your needs and risk tolerance.

3. Avoid overlap

It's easy for recommendations to overlap when working with multiple advisors. That’s because they don't have visibility into your entire financial portfolio. This can lead to inefficiencies and paying fees for redundant products or advice. If multiple advisors aren’t communicating and tracking contributions across your accounts, it's possible you could exceed the limits. One advisor can see all your assets. And they can make recommendations that avoid these issues by considering your needs holistically.

4. Clearer communication

Rather than having to keep multiple advisors updated on your financial situation, working with one makes the communication simpler. They’re accountable for recommendations, and act as the single point of contact should any issues arise.

What are the downsides of working with more than one advisor?

Working with multiple advisors can have several potential drawbacks, including:

1. Conflicting advice. Different advisors may provide contradictory recommendations, which can lead to confusion and difficulty making decisions.
2. Lack of coordination. Without proper coordination, advisors may not have a complete understanding of your financial situation, leading to suboptimal recommendations.
3. Increased complexity. Managing multiple advisors can add complexity to your planning process. It can make it more challenging to keep track of your investments, goals, and financial strategy.
4. Potential for gaps in coverage. If the areas of expertise of your advisors don’t fully overlap, there may be gaps in the coverage of your financial needs.
5. Higher costs. Working with multiple advisors may result in higher costs, as you may be paying fees to each advisor separately.

Do you need more than one advisor?

If you must have multiple advisors, it's important to:

• Have clear communication and coordination among your advisors.
• Ensure that they’re working together towards your financial goals.
• Understand the areas of expertise of each advisor.

How do you know if an advisor provides holistic advice?

Here are some tips to help decide if an advisor can offer holistic financial advice:

1. Look at their credentials and experience. Holistic advisors will typically have advanced degrees, certifications, and a track record of providing comprehensive financial assessments. For example:

• A mutual fund registration is a regulatory requirement advisors need to sell and manage mutual funds. To get and keep this registration, an advisor must pass an exam and meeting other regulatory requirements.
• A life insurance license is a provincial certification that allows advisors to sell life insurance products in that province. To get the license, advisors complete a training program, pass an exam, and complete requirements to maintain their license.
• Certified Financial Planners (CFP) are required to take a comprehensive exam covering all aspects of personal finance and provide holistic planning.

2. Ask about their process. A holistic advisor will want to understand your full financial picture. This includes your goals, values, risk tolerance, taxes, insurance needs, estate planning, etc.

3. Look into their investment philosophy. Holistic advisors focus on aligning your investments with your financial roadmap, not just chasing returns.

The key is finding an advisor who takes the time to understand your full financial situation and provides advice for your unique needs and goals.