By Pramod Udiaver
Special to the Financial Independence Hub
While the online advice industry is still relatively new to Canadian investors, the breadth of online financial services has been evolving quickly. This is good news for investors who are looking for more goal-based investing options and services that consolidate their various financial needs.
Goal-based investing considers a client’s goals and the steps needed to achieve them. This practice helps investors see their financial goals as easy-to-navigate paths, with clear beginnings and ends. It ensures investors fund their accounts based on desired results, rather than how much they think they might need. And it takes the uncertainty out of investing by showing exactly how and when each goal will be achieved.
While investing and insurance goals are not generally planned under the same service, insurance is an important part of any financial plan and the goal-setting process. Progress towards our goals can be thwarted by events like disability, serious illness, or the death of a loved one.
Role of insurance
We see that in many cases, even if one of these events were to occur, clients say they would still want to stay on a path to achieve their goals. Proper insurance can help them stay on track by replacing a portion of their income while they are disabled, allowing them to maintain a desired standard of living and keep saving. Life insurance can ensure that goals set for one’s family, like sending kids to good schools, allowing the surviving spouse to retire comfortably, or the desire to leave a legacy in the form of a charitable donation, can still be achieved.
To help Canadians consolidate investment and insurance goals in one financial plan, we’ve released InvisorGPS, an online goal-setting tool that makes it easier for investors not only to set their financial goals, but also to track their progress towards meeting them. The digital platform includes a free life and health insurance needs analysis, which can help clients find appropriate coverage at the best rate. With the tool, investors can set financial goals, see how long it would take to meet the goals based on their current investments and savings, see how much they could save in fees, track their progress, and get access to experienced portfolio managers and insurance advisors.
Next could be mortgages, loans, tax, & estate planning
This is just the start of what’s to come for online advice. We believe robo-advisors will eventually grow into robo-platforms that will go beyond simply providing investing services, and expand to other areas of personal finance such as insurance, mortgages, and loans. Just like banks evolved from deposit and lending services to other areas of finance, robo-platforms will be the smart, technology enabled providers of integrated financial services of the future, focusing on client experience.
To support this change, robo-advisors will partner with traditional advisors and financial service providers to serve client needs in a better, faster, and cheaper way. Investing through robo-platforms will become the norm for most investors, until their needs evolve to a level where more customization is required, like tax management, estate planning, and debt management.
In the meantime, investors should be aware of options that can help them create easy-to-follow financial plans, and provide well-rounded guidelines on how they can achieve their goals.
Pramod Udiaver is the Co-founder and Chief Executive Officer of Invisor Investment Management Inc., an online financial advisor in Canada that provides personalized investment management services. Passionate about personal finance and a student of financial markets himself, Pramod & his team’s mission at Invisor is to simplify investing and help Canadians reach their financial dreams sooner.