The online discount brokerage firm, Questrade, has been producing commercials with the headline “retire up to 30% wealthier”. Their premise is how you can retire wealthier by using their low-cost, web-based, minimal service brokerage service. It seems simple and logical; if you pay less you will have more at retirement.
There is only one problem. The evidence tells us that it’s just not true.
Every analysis that I’ve ever seen comparing individuals who received professional financial advice versus those who don’t, indicate that the former will be in a much better financial situation than the latter. One study shows how those who get advice have 2.73%X greater financial assets after 15 years of getting advice vs. those without advice. That’s like having $273,000 versus $100,000 or $2.73 million versus $1 million. That’s hardly what I call retiring wealthier.
These well-crafted but simplistic commercials conveniently ignore the proven value created by professional and experienced financial advice. Using the commercials premise, we could all have more money and be better off by never hiring lawyers, architects, accountants or any other professionals.
This is not to say that there is no place for online services such as Questrade. For those with smaller portfolios, in simple situations, Questrade is a perfectly acceptable service. However, unless you have a high degree of expertise, discipline, and time to become skilled in areas such as risk management, and task and estate planning, those in more complicated situations probably won’t find Questrade to be in their long-term financial interests.
One must remember that real wealth management is not a one-time event but a lifelong process that must adjust to our own evolving personal wants and needs as well as the ever-changing world.
These commercials remind me a bit of a famous Mark Twain quote
“What gets us into trouble is not what we don't know.
It's what we know for sure that just ain't so.”
Thanks for reading
Paul