Nathan Garries Discusses Tech and Transparency in Financial Planning

People work nearly their entire adult lives for money. Yet most have a limited understanding of it. A 2019 study by the Government of Canada revealed that Canadian household debt represented 177% of disposable income and that 73.2% had some type of outstanding debt or used a payday loan the previous year. Nearly one-third of Canadians believe they have too much debt.  Many are feeling mounting pressure as they navigate the present and attempt to carve out a financial future. 

Nathan Garries

Nathan Garries CFP®, EPC®, CIWM®, FCSI® has spent decades harnessing the knowledge earned from real-world experience and continued education in order to help clients make better financial decisions. His experience in wealth, retirement and investment management led to earning a number of designations before he became a Fellow of the Canadian Securities Institute – the highest distinction reserved for dedicated financial professionals who demonstrate leadership, integrity, and commitment to their clients and to the industry. An advocate for transparency in financial planning, he was willing to share his insights and try to help readers better understand the financial realm.  

How would you describe financial management in general? 

Nathan Garries: Financial management can best be described as a growing family tree.  We not only look after the lives of our clients today, but also how the wealth we create together can or will affect their children and possibly grandchildren down the road. In its truest form, it means looking at the whole financial picture and how all financial instruments play a contributing factor e.g., taxes, debt and making sure that items like investment mixtures help us stay on course to maintain the goals we have outlined.

How has the industry shifted over the years? 

Nathan Garries: What I have seen over the decades is a greater division or shift in advice. We are seeing a larger divergence, where younger clients with smaller amounts of wealth are now getting access to financial planners – something that wasn’t typical for those age groups. We are also seeing that those with wealth want to make sure that their family members will benefit from the advice, fees, and access to family portfolios that they have in place.  Their typical goal is to create more family wealth by ensuring we create household accounts where mom and dad may carry the wealth, yet kids can gain access to mom and dad’s financial planner, accountant, lawyer, and fee structure.  It’s a win–win for all involved.

Technology has spurred quite a lot of innovation even in the financial sector. How has it changed your industry? 

Nathan Garries: Technology has shifted the ability for many individuals to be able to do a lot of their own investing.  I’m always in favor of people starting to save their money and invest it – the sooner the better.

What I have also seen recently is a notable shift from one of the largest market corrections to one of the largest market upticks – driving new investors into a market they never had direct access to before.  Many people can do their own research and while they are not necessarily making bad decisions based on their results, they may not be making the best-informed decisions.  For example: if I want to go online and design my own house, that’s a fantastic use of technology, but I then must ask myself are there things that I have missed that may affect how the house I am going to build is going to look or work?  At some point, you will need to seek out an expert – to help you finalize your decisions and ensure that all the work you put into that design doesn’t result in your house crashing down on you and your family.

That makes sense. Let’s talk about some specifics. What about robo–advisors – how are they different from what a financial advisor/planner can do? 

Nathan Garries: Robo–advisors have a place… they are a great place to start, but like so many things, they are not necessarily the best and only option for many people, either.

I don’t think it’s ever bad to get someone to start savings/investing for tomorrow right away, which is the real value I see from people accessing robo–advisors. There are questions clients may not know to ask that a professional will ask. This is where a human financial planner really outpaces any robo-advisor out there.

Also, the shift to robo–advisors seems to be a direct result of fees.  Fees are becoming more of a deterrent for people to seek out advice which can be costly as well.  Since robo–advisors help those with a small amount of wealth get into the habit of saving money on an ongoing basis and learning how investments can work towards their future, they can also be a stopping force that steers clients away from expert advice when they may need it the most.  

When people do choose to speak with a financial planner like myself, they find out quite quickly that our relationship is very collaborative, which helps gain trust. While most people want to be involved with their investing, they eventually want to be able to pass that process along to someone they can trust – and trust takes time.  That is where I see that the sole use of robo–advisors is lacking. They can be used best in a complementary fashion with a long-term financial management plan – created with your financial planner.

Stories about investment platforms made the mainstream news in 2020/2021, which will likely spur greater interest. What should people remember when they are creating investment portfolios? At what point should they speak with a professional advisor? 

Nathan Garries: I like to ask people who invest for themselves what they did when the market was crashing in March this past year. One of the most common responses is that they didn’t panic and sell. I consistently reply, “That’s fantastic….but did you buy?”  That always seems to change their perspective from being proud to being like, “Oh darn – I didn’t.” 

Financial planners can work with clients to help them take advantage of market cycles.  I’ve observed that people usually make the shift from DIY investing to placing their money with a financial planner after about three or so years of seeing no real gains in their portfolios.  Many make the change when you ask them, “At what point do you take profit?” That simple question can show the value in having an expert who knows the right questions to ask.

Just like robo–advisors, we all follow the modern portfolio theory that can help determine risk, but until the client themselves understand what risk means, there will always be a disconnect.  For example, one question could be, “Are you willing to tolerate  a 10, 20 or 30% dip in the value of your investments?” The client may say yes.  The next question would be, “For how long can you handle that dip?”  Many will respond that they can tolerate that type of dip for only a short period of time such as 3 to 6 months.  Those two answers are counterintuitive and require that more education be given to the client, so they understand what they just stated. Most new investors don’t realize this or simply don’t understand it.

When people begin to realize this disconnect: That their returns are no longer in line with what they thought were realistic goals – that is when they need to seek out an expert.

What changes have you seen in the industry since you began your career? What are the pros and cons of those changes? 

Nathan Garries: I’m noticing a sizable shift in the level of knowledge those financial experts are starting to bring to the table in the last two decades.

It used to be that for someone to be called a financial advisor they would take a course and that would make them a financial expert.  Unfortunately, that is still prevalent today.  This makes it more difficult for some people to understand that there is an extremely large difference between a financial advisor and financial planner –  for financial planners it comes down to years of education, additional certifications and putting your clients’ interests first.  

The industry is rapidly changing unlike anything I’ve seen in the past 20 years.  People have access to a lot more information that their parents or even grandparents did.  That access is prompting a greater shift – for financial experts to ensure they are providing complete transparency.  Our job should not just be to make our clients money, but also to protect our clients from those that seek out investors to take advantage of them-those who do not have the best intentions – those who do not have the clients’ best interests in mind.

Those professionals that adhere to their code of conduct tend to carry a greater degree of knowledge. Prospective clients should not perceive them as unattainable or that they are unwilling to work with them just because they don’t feel they have enough assets. I believe most CFPs are willing to work with any client if they are willing to listen.

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.