The 6 month review is important because it allows us to not only answer any questions about what we are trying to accomplish on behalf of our clients but also allows them to judge their progress against what their Wealth Forecast (last updated and revised 6 months ago) is suggesting where they should be.
During the conversation with a client in a recent 6 month review, he suggested that it was just hard to "wrap his head around of all the changes in the banking world today", but he especially wanted to make sure that he did not get "caught out" in the next market sell-off (because through the recovery and up until recently (when he became a High Rock client) his rather expensive mutual funds had not returned to pre-2008 levels), so he had kept a savings account (with a reasonable sum in it) with the same financial institution that also held his now shrinking mortgage.
Here is an example of how folks looking for "safety" are being conditioned to think that a financial institution is providing it, when that exact same banking institution is allowing you to have a savings account that earns you maybe about 0.25% on your account balance (which you are lending to the bank) and at the same time the bank is turning around and lending to you (for your mortgage) at a rate in and around 3%.
As a client of that bank, you should be infuriated because the bank is taking a 2.75% spread on your money from you!
The shareholders (of the bank) love it (it is pure profit).
As we will often say at High Rock, there are alternatives: If you can possibly earn 4-5% on your money (after fees and costs) with low levels of risk (and plenty of that in cash / cash equivalents) why would you:
1) be anxious to pay off a 3% mortgage?
2) why would you lend money to that same financial institution (who lends to you at 3%), basically for free? They would never do anything for you for free.
There are so many options for folks that are looking for great service and direction with equal or better safety (Canadian Investor Protection Fund) features outside of the mainstream banking and insurance institutions. Just because they are large and have been around for a long time, it doesn't necessarily ensure the quality of care or safety, for that matter.
Times are changing, there is a better way to save, grow and invest your money (and still get the service that you want).
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