Invest yourself without risking your pension

(Photo: Martin Flanders)

You can invest some or all of your savings yourself. However, keep in mind that choosing the second option will be useful for you to think for a moment about the consequences it may have for your retirement.

A US study published last year by Dalbar shows that 70% of independent investors surveyed do not have a retirement plan, while among investors who use the services of a financial advisor, this share drops to 25%.

The survey also shows that almost a third of self-directed investors do not know how much money they will need to save for a proper retirement, which is three times the share of investors assisted by an advisor.

Finally, we learn that 18% of independent investors do not know how much money they have saved so far for retirement. By comparison, only 7% of investors dealing with a financial advisor are unsure of the amounts already pledged for their retirement.

“I’m worried because I’m not sure that all people who invest on their own have all the elements they need to make the right decisions,” said Andre Lacass, financial planner at Lacasse Financial Services.

Fabien Major, financial planner at Assante Wealth Management, is a warning to investors who are fans of online brokerage programs that combine wealth and entertainment. “By mixing the two, you get an explosive cocktail,” he says. This is to play your future.

“I believe that certain investments should be reserved for a certain amount that will not harm wealth and will not change life plans in case of loss,” he added.

Hardbacon boss Julien Bro is particularly concerned about young investors who have opened a brokerage account for the first time in two years. “Many of them have never seen what an economic crisis is,” he said.

If markets fall sharply soon, he fears that these inexperienced investors will forget that markets are cyclical and that they will eventually, in theory, grow.

“People understand the basic principle, but when the financial crisis lasts a long time, the market depletes them,” he said. The result: these panicked investors are not selling at the right time, which could seriously damage their retirement plan.

Answer the request

Financial institutions deny that they offer a service that could jeopardize the retirement of customers if not used carefully. Rather, they insist on meeting the autonomy demanded by their clients.

“Every client has to set their own boundaries,” said Claude-Frederick Robert, head of the National Bank’s Direct Brokerage, stressing the importance of offering educational content and improving users’ financial literacy.

“Our role is to educate our clients,” said Mark Girard, vice president and general manager of Desjardins Online Brokerage. “It really depends on the needs and preferences,” says Sabrina Della Fazia of BMO InvestorLine. If the popularity of platforms continues to grow, it is definitely because people want autonomy.

Resources to help you

There are many sources of information to take the first steps in self-investment or move on to the next transfer. Here are some that should interest you.

BOOKS

A smart investor
(A smart investor), Benjamin Graham

“This book never goes out of style. It’s an entrepreneurial investment: if I buy a stock on the stock market, it’s because I understand why and under what circumstances I’m buying it, ”says Fabien Major of Assante Wealth Management.

Snowball effect
(Snowball: Warren Buffett and business life), Alice Schroeder

“It is interesting to understand the field of investment, the thinking of such a reputable investor as Warren Buffett. And since this is a biography, it reads like a novel. This is a great introduction, ”says Julien Bro of Hardbacon.

Other recommendations

Investing for teapots
(Eric Tyson and Tony Martin)

Invest in the stock market and get rich
(author Bernard Mooney)

Online brokerage. A small guide for independent investors
(Stefan Desjardins)

From zero to millionaire. Invest in the stock market without suffering
(Nicolas Berube)

PODCASTS

Plan
from Fabien Major

Describes itself as the “first Franco-Canadian podcast” on financial planning. On the menu: portfolio management, as well as insurance, budget, taxes or retirement. You choose the episodes you like best.

Rational reminder
(in English)

A podcast organized by two PWL portfolio managers with offices in Toronto, Ottawa, Waterloo and Montreal. Advice from Canadians for Canadian investors.

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