How consultants help clients plan career changes – Natural Self Esteem

And financial advisors are seeing tangible shifts in their clients’ priorities when it comes to their careers.

David Boyd, senior investment advisor at BMO Private Wealth, said more of his clients are strongly considering changing jobs to achieve a better work-life balance.

“What we see is [some people saying]”I used to have a job from Monday to Friday from 9pm to 5pm – now, due to Covid, I’ve managed to create more balance. [Is] I can keep this something and [is that] realistic about my employer?’” Boyd said.

Patrick Briscoe, Financial Planner at Bayswater Wealth Management and Investment Planning Counsel Corp. in London, Ontario agrees. He said “the overriding theme” why some of his clients are quitting work is the pursuit of a less stressful situation.

“Covid kind of woke people up that life is short and they want to enjoy it [it]’ said Briscoe. “Maybe in the last five to ten years [they’ve] focused a lot on work and less on the life side of that balance. Now I think the pendulum just swings a little bit more [to] the life side of things.”

Two of Briscoe’s clients – a couple in their mid-50s – recently decided to take early retirement. Before becoming Briscoe’s clients two years ago, the couple’s retirement plan was to continue working in manufacturing into their ’60s and then start drawing their pensions. The couple brought a portfolio of mutual funds from their previous company.

When the couple started considering early retirement, Briscoe adjusted his financial plan, initially developing “buffer strategies and what-if scenarios” to ensure they were covered during their retirement. The scenarios included “What if yields aren’t what they used to be?” and “What if inflation is higher than forecast?”

“These are things that are less protected if you don’t have a defined benefit pension. My job in this case was [to] cutter [the] make sure that even with an annuity or retirement plan that is now variable, we still have a strong chance of success,” said Briscoe.

Briscoe presented clients with a plan where the couple works part-time and a back-up equity strategy, namely a home equity line of credit in case the couple wants to access equity to supplement their retirement income without having to sell their home. The pair is also in a globally diversified, balanced portfolio that reflects a pension-style mandate.

Career changes can also occur earlier in clients’ lives.

For example, Boyd has two clients — a couple in their late 30s — who owned a small retail business before and at the beginning of the pandemic. Frustrated by the financial and emotional hardship of opening and reopening during the pandemic, the couple decided to sell the business to a competitor.

The wife had a legal background and later pursued a career in the field while the husband decided to stay at home and raise their two young children.

Two of the couple’s priorities, prior to the pandemic, were ensuring their RESPs were replenished annually and that their TFSAs were “current, fully funded and properly invested,” Boyd said. The couple each have an RRSP and TFSA and a family RESP.

When the couple decided to make the switch, Boyd worked with the couple’s accountant to evaluate various financing scenarios if they sold the business, the wife filed law, and the husband became a stay-at-home parent. Boyd and the accountant, realizing that the couple would not be making their typical income the year they sold the business, decided to use the RRSP account to fund the RESP and TFSA.

Boyd added that the pair also looked to their TFSAs for more liquidity, if available, in case they needed to remove those funds quickly.

“As we continued to fund the RESP, we calculated the dollar cost average, which takes market volatility out of play,” Boyd added, saying they did the same with the pair’s TFSAs.

Boyd said the pair is content to maintain its 75% equity and 25% fixed income asset mix in its RRSPs and TFSAs. With the woman back to practicing law, the couple will try again to catch up on the RRSP dues.

Briscoe encourages other advisors who help clients manage a career change to approach the planning phase with an open mind.

“As advisors, we need to challenge our preconceived notions of how we think retirement should look like – have more conversations, build relationships with the client so we’re better able to customize advice and find the right solutions their specific needs,” he said.

“It’s a team effort. Consultants need to make sure our ears and eyes are open, and we take as much information as we can from the client to ensure the plan meets its objectives while being financially responsible.”

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