With a fresh approach to financial literacy, Sapling Financial Planning aims to untangle the hidden costs of bank services and retail series mutual funds, and equip the community with unbiased, personalized financial strategies.
Certified Financial Planner and Chartered Investment Manager Lena Keshysheva recently launched Sapling Financial Planning in qathet, dedicating her extensive 13 years of industry experience to the empowerment and financial literacy of her community.
After a successful career with major financial institutions, Lena formed Sapling Financial Planning as a New Year's resolution to align her professional life with her personal values. Her new venture focuses on delivering unbiased financial planning by separating fees from investment management and other financial products. This ensures clients receive objective, reliable advice tailored to their unique situations.
Why pay for financial planning when banks offer it for free? According to Lena, many consumers need to know they are already paying for their financial plans through the management expense ratio (MER) embedded in their investment costs.
“That fee encompasses the financial planning cost and is about 2.21 per cent of your total assets annually,” explains Lena. “Over many decades, consumers have been well conditioned that this fee is a normal part of investing and that a financial plan does not cost you.
“This is a common misconception and needs to be addressed by regulators. In Canada, we are paying one of the highest investment fees worldwide. Changes are being introduced but slowly, and consumers are left navigating the muddy waters of our poorly regulated financial industry without adequate regulatory supervision of existing client-focused reforms.”
Over decades, this can drastically diminish one's financial health.
“If you invested $300,000 at a 2.21 per cent fee and anticipate average returns (gross of fee) of six per cent over the next 20 years, your bank would charge you $331,000, compared to $135,000 if you did your homework and found a good investment manager whose sole focus is your investments charging 0.8 per cent,” she adds. “That’s a whole 25 per cent erosion of your wealth over 20 years; you could have had a portfolio with $826,000, but now you are only left with $631,000.”
In contrast, investment management firms or robo-advisors often charge significantly less. An advisor focusing solely on investment management might charge only 0.8 per cent, or even less, for robo-advisors. Choosing these options after doing thorough research can drastically lower costs and increase returns.
Comprehensive financial planning — beyond mere investment management — typically costs between $45,000 and $60,000 over the same period.
“This fee covers unbiased advice that not only aims to achieve financial gains but also enhances emotional and overall well-being.”
Lena stresses the importance of consumer education and financial literacy.
“My mission is to advocate for consumer education so consumers can retain more of their hard-earned money and receive proper advice that increases their emotional and financial well-being,” she says. “While banks may offer free financial planning, hidden fees and often limited scope of such plans can cost you dearly in the long run. Investing in unbiased, comprehensive financial planning preserves more of your wealth. It aligns financial strategies with personal goals and aspirations, setting you up for a more secure and fulfilling life.”
Lena advocates for an advice model that empowers consumers rather than keeping them dependent on advisors. This approach, she explains, enhances financial and emotional well-being, as supported by research from FP Canada.
For those interested in exploring how their financial strategy aligns with their life goals, Sapling Financial Planning offers an introductory 15-minute phone consultation. More information can be found saplingfp.ca.
