A few months ago I made an offhand remark in a weekend reading update that caught the attention of several readers:
“You might be surprised to hear that if something happened to me, my wife has been instructed to hand everything over to PWL Capital. That’s how much I believe in the good work that group is doing.”
Apparently that surprised some of you. I understand that it’s a surprising statement coming from an advice-only planner who is a big proponent of self-directed investing.
Here’s one recent email from a long-time reader:
Hi Robb,
I keep going back to this comment which you made a while ago. I’m not sure if anyone else has noticed or reacted. So as a “fee-only advisor,” and a “one-fund” investor I am curious as to how you have arrived at this decision. What is it about PWL that made you arrive at this decision to let go and let someone else carry the load?
To start, I don’t have any affiliation at all with PWL Capital – I talk them up because I really respect the work they do for their clients, for DIY investors, and for the financial planning community in Canada (truly leaders in their field).
The fact is my wife is a brilliant woman who understands our financial situation and investing approach, but she has little-to-no interest in managing our long-term financial plan.
And while I’ve taken great steps to simplify our financial life so that, in theory, someone could take the reins after I’m gone, we still have a complex situation with a corporation and multiple account types.
It’s not just about continuing to hold VEQT or XEQT across all accounts. It’s the tax planning that complicates things, and where a firm like PWL can help ensure the correct compensation (salary/dividends from the corporation, withdrawals from personal accounts, timing of government benefits) is used throughout her lifetime to meet financial goals for herself and our kids.
For some context, imagine I tragically get hit by a bus in 12 years. At that time, we have a net worth of $5.66M, and $2.2M of that is in our corporation.
Does this look like a simple situation for someone to begin their DIY planning and investing journey?
Meanwhile, PWL is out there leading the charge on evidence-based financial planning (plans before products) and investing. They use one-fund solutions from Dimensional Fund Advisors, that have a tilt towards small cap and value stocks that have (theoretical) higher expected returns than a market-cap weighted index fund.
“PWL’s service includes goals / values identification, asset allocation, portfolio management, retirement planning, tax planning, and estate planning. We view all planning and advice through both utilitarian and emotional well-being lenses.”
They charge reasonable fees (well under 1%, since it’s on a sliding scale based on investable assets) and that fee would be easily made up in peace of mind for my wife to not have to think about this, and for the precision-like tax planning to help my wife and kids meet their spending needs and live their best lives in the most efficient and effective way.
I realize that paying fees of $25,000 per year might sound outrageous to some of you – but to put that into context it’s just 0.57% per year to work with a firm and advisor team that I completely trust to look after my family’s best interests.
A reasonable alternative might be to transfer everything to Wealthsimple’s robo-advisor (managed) solution and use their financial planning and advisory service. The cost would be similar (0.40% management fee + the cost of the ETFs used in their model portfolios). Let’s call that plan ‘B’ in case PWL gets bought out by an evil bank or something.
But what I like about PWL is their commitment to finding and funding a good life for their clients. They put planning, goal setting, and well-being first, and then they’re at the cutting edge of best practices to help clients meet those goals in the most tax efficient way.
That sounds like a pretty good recipe for successful outcomes.
This Week’s Recap:
Last week I shared an update to our 2024 financial goals and a look ahead to our goals for 2025.
I was happy to contribute to this article on why some retirees are reluctant to spend money when they can afford to (Toronto Star subs).
Promo of the Week:
Get an iPhone or Macbook when you register and move $100,000 or more to Wealthsimple.
- Register by December 13th
- Transfer or deposit $100,000 or more within 30 days of registering
- Once you qualify you can choose an iPhone or a Mac starting January 15th
- Deposit $100,000 – $299,999 and you’ll get an iPhone 16 or a MacBook Air.
- Deposit $300,000 – $499,999 and you’ll get an iPhone 16 Pro or a MacBook Pro.
- Deposit $500,000+ and you’ll get an iPhone Pro Max or a MacBook Pro with M4 Pro chip.
Get another $25 when you fund any Wealthsimple account with my referral code: FWWPDW
Transfer or deposit at least $100,000 of qualifying funds into your Self-directed Investing, Managed Investing, or Cash account within 30 days of registering.
Weekend Reading:
Here are five costly mistakes to avoid in your 40s for a better retirement.
The psychology of retirement income – from saving to spending.
From CTV news, here’s how to switch from saving for your golden years to spending.
Aaron Hector shares what the REAL OAS deferral enhancement means.
How often should you update your financial plan? Jason Heath explains why a financial plan is never final.
Ben Felix looks at Trump’s win and expected stock returns (the Presidential puzzle):
A Wealth of Common Sense blogger Ben Carlson looks at the 30% up years in the stock market.
The biggest risk to your retirement might not be what you think (spoiler, it’s inflation).
The Loonie Doctor takes an in-depth look at a common problem – transferring a managed taxable account to a self-directed brokerage and capital gains tax versus fee savings.
Finally, a recurring theme, why retirees struggle with the transition from saving to spending.
Have a great weekend, everyone!
