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Mar 1, 2021

You Are Your Own Best Financial Planner

by Gerry Hogenhout
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Gerry HogenhoutEveryone needs some type of financial roadmap to help navigate their own financial life and I am here to tell you that the best person to create this roadmap is you. You may not realize this, but it is not that difficult to become your own financial planner as well as to create your own financial plan; all you need is a basic financial planning software tool, some training, as well as a support system to go along with that. With that said, our goal is to revolutionize not only how people perceive financial planning, but how they do their own financial planning. But first, let us take a step back.

When people think of their finances or, more specifically a financial plan, most will go to an investment advisor who holds an investment license to get the financial advice or a financial plan they desire. Now, before I go further you need to understand that there are two particularly important, and very separate, components to a financial plan;

1)    the actual financial plan itself, and

2)    the investment products (stocks, mutual funds, private equity, real estate etc) and the financial services (your own mortgage, your insurance etc) needed to be implemented into the financial plan.

These are two vastly different components which need to be looked at separately. Yes, financial plans need investment products and financial products but there are literally hundreds of different investment products and financial services available but, when using a financial advisor who holds an investment license, that advisor will only have access to a limited number of investment products given they only have access to the products available to the company that licenses them (forgoing many investment products that you may actually want in your financial plan).

Once you realize this you better understand what I have come to realize for some time now, that it is impossible for someone to get unbiased financial advice from a financial advisor that holds an investment license. Sad to say but the licensed financial advisor is simply licensed to sell certain investment products. In fact, the fiduciary responsibility of a licensed financial advisor is to the company that licenses them and, unfortunately, not to you. To say this another way, a financial advisor who holds an investment license cannot put your best interests first, they must put the best interests of the company that licenses them first. In other words, they must sell their products that they are told to sell. This is a very sad realization for anyone expecting unbiased financial advice and help.

This realization was quite an awakening for me, especially given that I am a Certified Financial Planner (CFP) and one of the requirements to hold that designation is to ensure that the best interests of my clients are put ahead of my own. It was quite alarming to realize that this was impossible while I was holding an investment license. With this said, you cannot blame the licensed financial advisor, it is not their fault, it is the fault of the investment industry. There is a serious disconnect between the entities that issue professional financial designations such as the CFP and the entities that govern and license the sale of investment products. This makes it very unfair to the many unsuspecting people who will assume that their licensed financial advisor is acting in their best interests. Trust me, they are not and, sadly, they can not. Once this realization sets in and is better understood, a person can then become empowered to change how and from whom they receive their financial advice.

Now that you know this, let us go back to your financial plan. The best advice I can give anyone is to separate the two components of your financial plan, ie, separate the creation of a financial plan from the purchase of investment products and financial services to implement within your financial plan. Just my opinion, but I think everyone should try and do implement their own financial plan, it empowers you financially. You need to educate yourself, and get the right information, to help you select the investment products and financial services that you want to implement into your financial plan. By approaching your financial planning in this manner, you are in much better control of your overall finances and, more importantly, you are invested into investment products and financial services that you actually want to be invested in, and not just something sold to you in an unsuspecting way.

Contrary to what many people think, you do not need to hold an investment license to provide financial and investment advice. With that said, you do need an investment license to process or facilitate an investment order. In other words, you need an investment license to sell an investment product but you do not need an investment license to discuss, provide education and information about investment products and financial services. Just my opinion, but some of the best financial advice you can get is from someone who has nothing to sell.

Also, many investment products do not fall under the governance of a regulatory body, such as many real estate related investment opportunities such as real estate FixNFlips, real estate joint ventures, holding mortgages in RRSPs etc. It is for this reason that advisors that hold an investment license cannot even suggest to their clients to invest in FixNFlips or joint ventures or holding mortgages in their RRSPs, which is actually quite sad given most people prefer to be invested in some type of real estate related investments.

So, in summary, separate your financial plan into two components; 1) the actual plan itself and 2) the investment products and financial services to be implemented into that financial plan. Also, consider doing your own financial plan. For the do-it-yourself financial planner, visit for a free copy of a financial planning tool called Financial Vision, which is basically a very basic easy-to-use Excel spreadsheet.

Good luck!

Gerry Hogenhout, CPA, CGA, CFP, AMP is the founder of the Child Home Ownership Program (CHOP) and the principal of Hogenhout & Associates Incorporated.