These days, it’s easy to feel like an expert in areas in which you have no experience, much less expertise. From medicine to movie-making, from politics to prognosticating about climate change, the ease of access to volumes of information, and misinformation, turns so many digital citizens into Dunning-Krugers.*
It’s no different with financial advice. Everyone needs it – we all deal with debt, loans, retirement and savings as a crucial part of our lives. Thanks to the internet and all the financial apps on our phones, we’re privy to so much “free” financial advice that it may seem pointless to hire a real ‘advisor’.
But just because someone can make a movie on their iPhone doesn’t mean you should hire them to direct a movie – or even to film your wedding.
When it comes to money management, there’s no replacing the advice of well-trained professionals in the field. It’s tempting for high-achieving professionals to try to take money matters into their own hands – but research shows* that, paradoxically, the more financial education a ‘layman’ receives, the more their portfolio actually suffers. “A little knowledge” can actually be dangerous when deployed with false bravado.
It’s foolish to try to oversimplify a complex profession, especially when your money is at stake. There’s an adage that free advice can be incredibly expensive – “if you think a professional is expensive, try hiring an amateur”. This certainly applies to your financial decisions.
Senior Investment Advisor Lyle Langlois of iA Private Wealth in Vancouver has over three decades of experience with managing the wealth of high-net-worth individuals (HNWIs). Langlois has seen firsthand how investment goals are formed in collaboration with teams of advisors, and how those decisions play out over time.
Langlois emphasizes the intricate nature of today’s financial environment. “The financial world has become increasingly complex. For most individuals, keeping up with market trends, income tax changes, new investment products, and making informed decisions can be overwhelming.”
The one-size-fits-all approach doesn’t work in wealth management. According to Langlois, “Each individual’s financial situation, goals, and risk tolerance are unique. As advisors, our role is to gather the information, ask the right questions and craft strategies that align with these personal factors. Professional advice is not just about choosing investments; it’s about crafting a holistic plan that encompasses all aspects of a person’s financial life.”
While acknowledging the growing role of technology in investment management, Langlois believes in the irreplaceable value of the human element. “Technology has transformed how we analyze data (to see clearly what has happened) and manage portfolios. However, the personal touch, understanding clients’ life stories, and being there through their life’s journey – that’s something technology cannot replicate.”
For newcomers to investment, Langlois offers straightforward advice: “Do your research when choosing an advisor. Look for someone who not only has the credentials and experience but also values open communication and builds a relationship based on trust.”
Looking ahead, Langlois sees a landscape where advisors must balance technological advancements with personalized service. “The future of wealth management will involve leveraging technology to enhance our services while maintaining the core of our profession – understanding and serving the unique needs of each client.”
Langlois’ insights reaffirm the value of professional investment advice in managing long-term wealth. In an ever-changing financial world, the role of a knowledgeable and empathetic advisor is not just beneficial but essential. As Langlois succinctly puts it, “In the journey of financial planning, a skilled advisor is your best navigator.”
* The Dunning–Kruger effect is a cognitive bias in which people with limited competence in a particular domain overestimate their abilities
**Dalbar study costs 4% per year investor behavior
Disclaimer:
This information has been prepared by Lyle Langlois who is an Investment Advisor for iA Private Wealth Inc. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.