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June 15, 2021

Investors employ lifeboat drill to develop a sense of the future

The last few weeks in the Canadian market have been difficult ones and you can’t be certain as to
what’s in store in the near future. In the mean time, investors are being told to resist the temptation to pull the trigger.

Life Trying to control your portfolio in response to world events provides a short-term illusion of sound decision-making, but may come at a long-term cost, warns David Crowder, a consultant at Russell Investments.  

It’s important to understand that it's changes in your life, often made by choice, that have a far greater impact on your wealth than any collection of current events.

A marriage, divorce, child entering college or a new job are far more significant to the average person than the crisis du jour. And the good part is that you can, for the most part, control your responses to these life-altering events, he suggests.

One of the keys that busy people look for in an advisor is someone who monitors their situation, primarily so they don't have to. The result is a better, more responsive model that is built on understanding clients, says Frank Maselli, another consultant and popular sales trainer.

One of his favourite exercises involves participating in a “lifeboat drill” with an advisor where you both try to determine what you would do in certain scenarios – mapping out a plan to handle contingencies.

A clear understanding of your needs and a roadmap to help get there could put you in more control than you might think possible, Crowder suggests.

Have you gone though this exercise? Useful? Or just a way of mollifying nervous clients?

By Gordon Powers, MSN Money

* Follow Gordon on Twitter here.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...