The democratizing of financial services

A few years ago, I began to hear about the democratization of investing into private equity.  It was recognized that the earnings can be significant. Allowing the grandmother investor, for example, to put money into privately owned companies in the same way the public stock market allows, will have a way to go.
Currently, one way that was created to allow the average joe to invest with minimal knowledge is by going into your bank and selecting mutual funds. They show up on your bank app and give a pretty reasonable return.
Using the TFSA account, the average person could also invest into a startup but maybe (probably) lose their investment as the risk is so high at such an early stage.
So although we do have some democratization of the investment opportunities, the Canadian retail banks do offer their mutual funds which are a great start, the fees are hidden and do take a significant chunk of the returns.
We will come back to mutual funds and other investments where you can get started. In the meantime, one of my favourite motivational coaches, Tony Robbins, has put out a book on Money. In it, one his themes was about - surprise - democratizing investments. I liked his message:

Think about the four main elements that impact our quality of life: our relationships, emotions, health, and money. The most difficult one for many people to manage—and a frequent source of widespread confusion and anxiety—is the money.

2015 is the year that will change.

The One Big Idea for 2015 is the democratization of financial services, which means that for the first time, everyone will have access to the unbiased advice and education they need to make confident, informed decisions about money and investing. Everyone will be able to find knowledge, tools and insights to help them achieve their financial goals.

The current financial system is opaque, complex, and designed to enrich and reward those on the inside. Average investors are so in the dark when it comes to the system that most don’t know just how much they don’t know.

For example: how is your financial advisor compensated? Do they have a legal duty to put your interests first, or are they primarily paid to distribute products? If you’re like most people, you don’t know.

What can you do today for your retirement?

Saving for our children's university and retirement is one of life’s biggest savings, but surveys show these investments too often come last.
What could you do if you can see yourself in one or both of these situations?
 Something. 
Start by trying to save just 2% of what you’re bringing in; put the contributions on systematic automatic contributions to be sure they make it into the designated pot. 
Here’s the deal. Someone is reading this and thinking, `What the heck. It’s too late for me.’ But you don’t have to make these changes all at once. Look at your long-term plan and trim away that extra tank of gas or movie night out to start supporting all that you want down in ten or fifteen years.

Jacoline Loewen 

Just take the time and get your financial goals written

"If your financial plan is not written and measurable...it's just hope!"

Wealth managers versus brokers

Typically, wealth managers, also known as financial planners, earn their living either from commissions or by charging hourly or flat rates for their services. A commission is a fee paid whenever someone buys or sells a stock or other investment. You may want to avoid financial planners who rely on commissions for their income. These advisers may not be the most unbiased source of advice if they profit from steering you into particular products.

A growing number of financial planners make money only when you pay them a fee for their counsel. These financial planners don’t get a cut from life insurers or fund companies. You might pay them a flat fee, such as $1,500, for a financial plan. Or you could pay an annual fee, often 1% to 2% of all the assets—investment, retirement,  university savings and other accounts—they’re minding for you. Others charge by the hour, like lawyers.

You might also encounter financial planners who cater exclusively to the rich and refuse clients with less than $2 million to invest. Don’t take it personally—hugely successful planners in this range of wealth are called wealth managers and would just prefer to deal with big accounts rather than beginner clients. 

You want a planner who’ll make the time to focus on your concerns and is interested in growing with you.

If you have more than $2 Million to invest, look for the wealth managers usually found in the global banks.

How do you select a financial planner when you sell your business?

When you sell your company and all of a sudden, you have millions to invest, it can make you quite giddy. All of a sudden, your long last relatives will appear on your doorstep asking for a loan or an investment. Your niece will want you invest in her new app which is "brilliant".  Suddenly, you can access wealth manages who need you to have more than $2million to open an account. These wealth managers are the elite of financial planners.

Financial planners advise clients on how best to save, invest, and grow their money. They can help you tackle a specific financial goal—such as giving you a macro view of your money and the interplay of your various assets. Some specialize in retirement or estate planning, while some others consult on a range of financial matters. At the very least, they should find out about your family.

Don’t confuse planners with stockbrokers — the market mavens people call to trade stocks. 

Financial planners also differ from accountants who can help you lower your tax bill, insurance agents who might lure you in with complicated life insurance policies, or the person at your local bank urging you to buy their off the shelf mutual funds.

Anyone can hang out a shingle as a financial planner, but that doesn’t make that person an expert. They may tack on an alphabet soup of letters after their names, but CFA (short for certified financial planner) is the most significant credential. A CFA has passed a rigorous test on the specifics of personal finance. CFAs must also commit to continuing education on financial matters and ethics classes to maintain their designation. The CFP credential is a good sign that a prospective planner will give sound financial advice. Still, even those who pass the exam may come up short on skills and credibility. As with all things pertaining to your money, be meticulous in choosing the right planner.

Their firm is important. Some small planner make you pay dearly. They are smart but you end up paying more as they still have to place orders for your portfolio and they will have to pay a fee and pass that along to you.