How do you deal with your money? Do you juggle multiple accounts and keep a close eye on the stock market, or are you the type to stuff your cash in a shoebox under your bed and avoid looking at your balances? Money needs managing, which is why we spoke with financial planner Shay Steacy of InBalance Financial Planning, who helps Canadians map out their futures. She breaks down the difference between financial advisors and planners and lets hosts Cadeem and Bethan in on the red flags you should watch out for when deciding where you get your money advice. We also talk with Moneywise personal finance reporter James Battiston about the importance of financial literacy and education, particularly for young Canadians.
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How do you deal with your money? Do you juggle multiple accounts and keep a close eye on the stock market, or are you the type to stuff your cash in a shoebox under your bed and avoid looking at your balances? Money needs managing, which is why we spoke with financial planner Shay Steacy of InBalance Financial Planning, who helps Canadians map out their futures. She breaks down the difference between financial advisors and planners and lets hosts Cadeem and Bethan in on the red flags you should watch out for when deciding where you get your money advice. We also talk with Moneywise personal finance reporter James Battiston about the importance of financial literacy and education, particularly for young Canadians.
Enjoyed this Episode?
If you did, subscribe and share it with your friends!
Post a review and share it! If you enjoyed tuning in, leave us a review.
Have any questions? If there’s a topic you’d like us to cover, send us an email at hello@halfbanked.com!
Thanks for tuning in! You can find us on YouTube, Apple Podcasts, or Spotify! You can also follow us on Instagram, TikTok or Twitter for more clips and updates or visit our website.
I'm Cadeem Lalor.
Bethan Moorcraft:And I'm Bethan Moorcraft.
Cadeem Lalor:And this is the Half Banked podcast. So Bethan, who do you trust with your money?
Bethan Moorcraft:I'd say I'm quite a closed book when it comes to my money growing up, I certainly took advice from my family, following three core tips of save, don't spend more than you have, and try not to go into overdraft. But beyond that, as a young professional, I've handled all of my money myself without any professional help. And I think at the root of that is trust. But we're going to dig into that in today's episode. Cadeem, how about you? Do you use a financial advisor?
Cadeem Lalor:I don't. And I think growing up, I basically had the same upbringing in terms of those three key lessons and trying to incorporate those into my spending habits. But aside from that, maybe trusting maybe a belief that I don't have enough to make it worthwhile to look into professional. But I think that might not be so true. So how about the worst piece of financial advice you've ever received?
Bethan Moorcraft:So I have to look back to when I first moved to Canada a few years ago, and had to learn a whole new economic system, I went to the bank to open a TFSA savings account, but an advisor upsold me into opening a multi holding TFSA investing account. What he didn't explain at the time was the management expense ratio, or MER, which is the cost of investing in a mutual fund, which was significantly higher than it would have been for me to do a little bit of my own research and manage my own investing. I'm frustrated by that now, but at the time, it did seem like a good option. So I guess it's a good lesson learned. Cadeem, how about you?
Cadeem Lalor:I mean, for me, maybe there isn't one particular instance that stands out. But I think just growing up, we've always had that small group of friends, basically, who have their eyes on the next big investment, now it's Crypto, NFT before may have been something pyarmid scheme related. So I think basically trying to avoid those people who are trying to get you to invest in something that you don't fully understand and that they might not understand either.
Bethan Moorcraft:Well, these days, there are so many ways to be tricked or conned out of your money. The latest update of the financial well being survey shows that 42% of Canadians were targeted for financial information through phishing, or hacking.
Cadeem Lalor:There is also a Scotiabank poll that shows that 54% of respondents receive bad financial advice at least once in their lives. Surprisingly, only 39% consult with a financial advisor.
Bethan Moorcraft:At the same time, one in five said they gave financial advice without knowing what they're talking about. And our producer is looking rather sheepish with that statistic.
Cadeem Lalor:Who knows, I might be guilty of that myself as well. So our guest today is Shay Steacy who's a Certified Financial Planner and money coach with InBalance financial planning.
Shay Steacy:Hey, I'm happy to be here.
Cadeem Lalor:So I guess you can tell we're not maybe the most trusting duo so far. Think sometimes it's tough to decide between family, friends, there's always unsolicited advice, you know, in person and online, in terms of who you should trust with your money, what investments to make, how to budget and so forth. So I guess I was wondering, as a professional, how do you recommend finding someone with sound financial advice that you can actually trust?
Shay Steacy:I think clarifying the word "trust" would be one of the first things. When thinking about money, I think a lot of people with trust you think of like the Bernie Madoff and like Ponzi schemes and things like that places where you're going to potentially lose your money because someone is doing things illegal with it. So I think that now in the financial world, is looking at who really does have your best interest in mind when they're giving you financial advice. So what maybe do they have to gain by advising you? And one of the things that I do believe is, a lot of people who are giving financial advice are salespeople. And that's one reason why I got out of that world. Because as good as I would try to be in financial advice, if I was always going to be reviewed for my job performance on how much I sold, versus the amount of advice I gave or the quality of advice I gave, I realized that that just didn't kind of line up with my values.
Bethan Moorcraft:I remember a time I went to the bank got some advice from a nice man. And he told me that he'd invested his parents money into a certain mutual fund, and it was the best fund ever and their returns were great. And it won be over at the time. But looking back, I'm like, definite sales tactic.
Shay Steacy:Yeah. And an interesting point there when you bring up parents is I think that sometimes even looking beyond parents to like your parents advisor is a next natural step for a lot of people. And I don't think that it's not that you can't trust that person. I think that there just could be a lot of difference in the advice that they're really good at giving. And so it's not that you can't trust them nor the advice it just may not be the best advice for you in that situation or in your age and stage.
Cadeem Lalor:It sounds like relatability, to the certain extent is a part of the trust as well. So I'm being able to kind of empathize with your situation, your goals, your age, and so forth.
Shay Steacy:Yeah, empathize, but also maybe know what's important at that stage. Right? I used to work with people who were kind of nearing or entering retirement or even later, and I talked a lot about estate planning and how you draw down on your money during retirement. I didn't talk a lot about okay, if you have a mortgage to pay down and kids to raise and mat leaves coming up, like how do you make income, meet all of your needs? That wasn't conversations that we had then. And now that's what I have when I'm working with. I say, I work with people that 10 years plus or minus my age, so depending on how old do you think I am? That's my clients ages.
Cadeem Lalor:I don't want to ask, so I'll set my guess. Okay, thank you.
Bethan Moorcraft:So what would you say for somebody like me, someone who's never worked with an advisor or planner before? What would the benefit be, for me at this point, in my career? I'm a young professional, you know, I haven't done any of the big milestones, yet, I haven't got a mortgage, not married, etc. But you know, those things are potentially on the horizon. So why might now be a good time for me to start considering it?
Shay Steacy:The best thing that you've got on your side now is time when you're looking at some of the things like investing small amounts of money so that they can grow over time. But I also think that if you're going to talk to someone, and all that they talk about is investing, you may want to maybe find someone who will actually focus on other areas of your overall financial wealth. For me, everything will come down to cash flow for a client. So that doesn't mean it's a one size fits all approach for everyone. It's just well, if you don't understand your money coming in, and your money going out, and talking to someone who can help you maybe balance all of your needs and talk to you about what is important to you. What are your goals or priorities maybe in the next couple of years? And instead of just saying, Okay, well, we know you have to save for retirement so put some money away, right, let's actually have a conversation and start taking baby steps to making some small changes that will ultimately lead to big results.
Bethan Moorcraft:It's hard to have a big picture view at this point in life. It's quite immediate in terms of how you manage money and what you do. So it is interesting that working with an advisor might perhaps open that and make you think a bit differently about the long term, definitely.
Shay Steacy:Only thinking about the long term isn't the solution, either. It is like let's talk about what your life looks like now. And some things that you can do today to make your life better and make you feel more successful with your money. Because as soon as you start to feel little successes, I think then a momentum will also grow. And you'll want to continue down that path.
Cadeem Lalor:So I was wondering, as we look at, I think you've touched on the sales piece of financial advising. And I guess there's some confusion about the financial advisor piece versus financial planner, are you able to differentiate those two for us?
Shay Steacy:I wish there was an easy answer. And this is really challenging as someone in the industry that I can't provide you with a simple answer to this. So the first thing I will say is that different titles for what people can use might vary between companies might vary province to province, but there is starting to be some regulation around this. But I still don't think that it is going to help someone truly know how that person is going to help. So the first thing I'll say just about the titles in Ontario, specifically, financial planner is designed to be used more around when someone has education and qualifications around looking at all areas of someone's finances and bringing those things together. So that could be tax planning and estate planning and risk management a whole a whole bunch of different areas. The term financial advisor is more for when people are well versed in kind of one area and it's typically investments so that they are qualified to sell or discuss investments. That's not to say that a financial planner is not also a salesperson, again, it can depend on where someone is working, but that the regulation that is coming out. To me what's more important is the distinction between being someone who sells financial products, and someone who sells their advice. And that is where I fall in now that I am an advice only financial planner. And there's even a whole bunch of different terms for that as well and still confusion within the industry. But if there is no cost to you to get advice, then you're probably the product, if that makes sense. And making money from selling something to you.
Cadeem Lalor:Okay, so it's never basically as free as it seems in that sense.
Shay Steacy:No.
Cadeem Lalor:Okay. And I guess on that topic as well, when you're looking for one, there's so many options, you can go through, you know, your financial institution, or the mental institution that your parents use, even do a quick Google search, but then what pops up first might not necessarily be the best option. And I've touched on the relatability piece, you tried to differentiate between, you know, the planner advisor titles, looking at that, but I guess, is there anything else in particular, you're thinking of when you're looking at an advisor in terms of how to judge if they're the right fit for you?
Shay Steacy:I think a big thing I would ask about is what kind of clients they typically work with? Are their clients, people like you who have the same questions and concerns that you might have. There are even certain people who work in different industries, who might have advice that's more kind of fine tuned and applicable to kind of you versus someone else. So understanding who they work with would be a big one. And again, coming back to how people get paid I... That's a big thing I would ask an advisor is how they get paid, what total costs will be? And what are their qualifications, right? I mean, unless you're selling products, and even if you are selling products, it's kind of a lot of areas where you can give advice, and maybe not necessarily be qualified. So asking them what schooling they have, or what courses they do, what kind of codes they abide by, and things like that.
Bethan Moorcraft:So it does seem a little bit confusing. Even in the industry, there's a bit of discrepancy between what as a planner, advisor, etc. So you need to do a bit of due diligence, what would you recommend doing, if someone feels that they picked an advisor, and then that advisor isn't necessarily the best fit for them.
Shay Steacy:It may depend on how the relationship is built or managed. But I think the big thing is that it is your money and your life. And if there is something there that doesn't feel right, to think about yourself first, right? We want to be very nice sometimes. And I don't think that that needs to apply here. Money is very personal money is very emotional. And if there isn't trust or a good fit there, it's not going to help anyone, it's not going to help the adviser, so I wouldn't be too concerned about them. And it's most certainly not going to help you. So that may mean if you've got investments or something with this advisor that you may need to move them to a different institution. And it seems intimidating, but it doesn't have to be. Or the relationship just may be that, you know, maybe you're transferred to someone else within the same company, or you stop paying them if you're paying for advice only. This is where you have to think about you and not the other person's feelings.
Bethan Moorcraft:It's your personal finance. So you've got to look after yourself. So one big trend I've noticed in recent years is that a lot of young people are taking their financial advice from social media stars. It's a new word for me, but there are 'finfluencers' these days that are sort of posting three best stocks to pick or you know, how to file your taxes for the first time ever. And these are all interesting, fun, informational videos. But how do we know if we can trust them? Number one, and number two, how important is it to kind of take advice from social media or even online blogs, etc. with a pinch of salt?
Shay Steacy:It is more than important to take everything with a pinch of salt. The first thing I'll say is being Canadian. What I do see is financial advice that isn't applicable here, right? Because we are so close to the States. And we sound a lot like people from the States. I've even had friends send me a post. Is this true? And I'll look and say, you know, no, it's American. And it might be true there I'm not sure here. So I think that is something to be very mindful of because I could not be a financial planner in the States. My mom actually lives in Florida and I can't help her with a lot of things. It is so different. But general basics can be similar, right? If it comes to specifically cash flow and not spending more than you earn, I mean, that was good. Right? Where you grew up? It's good here, it's good in the States. A financial planners favourite answer is it depends. And when you're getting general answers from, you know, a 20 second reel or have, you know, a minute long tik tok video, that person knows nothing about you. So I'm not going to lay a blanket statement and say you can't trust anything. But what applies for each of you may be different from me. What applies to me might be different from my neighbor. And that is, I think, the biggest risk you're going to get if you rely on general, and let's call them like sexy topics, right? That you're going to see, because boring stuff doesn't make for good views, like I would not get a lot of follows by talking about some of the stuff I talk about. Because I'm super boring when it comes to what are good things to do with your money.
Cadeem Lalor:You know, when you try to really master financial independence and trying to build wealth and passive income and so forth, we're looking at trying to build you know, a better relationship with money. And the term gets thrown out a lot. But that can apply to you know, trying to cut out impulsive spending looking at, you know, the why of the buy, as some people would say, so I guess I'm wondering, then, is like, how can someone develop better relationships with their money? And how can they basically lead to more informed decisions that look at kind of the why of the buy.
Shay Steacy:Avoiding money is never the answer.
Cadeem Lalor:Okay.
Shay Steacy:I do know that that is a common thing for people is if they don't review their transactions, or open their bank statements, then everything seems fine. And as much as it might suck, understanding the basics of even just what's going through your bank accounts, or what's being put on your credit cards, is so important. So that would be a very first step, if there is avoidance to start small, if that's all it takes, right? If it's opening a bill that happens to come in the mail, or the email that you've got some mail on CRA, that may be your first step, right. Understanding the very basics would be my next thing and the basics being the foundation of your money or your households money. So how much money is coming in on a regular basis? How much is going out for things that stay relatively fixed month to month? And this is where you can get into very nuanced discussions of is something a fixed expense or a variable expense? Is it a need? Is it a want, right? A good example for you know, a need or a want organic produce? Was that a need or want, right? You have to eat, but does... So for me, I have a different way of working with cash flow with clients to help achieve balance. That's why my company name is InBalance Financial Planning, setting up as many things as you can on autopilot so that you can focus on other things. And maybe, like a little bit less of scrutinizing every single thing is allowing yourself permission to enjoy life today, knowing that you are doing things to help future you, right, finding that balance.
Cadeem Lalor:I guess just as a small tidbit on that because I have also read some things where there's incidents of people getting so used to the auto billing, sometimes they kind of almost forget about certain charges, or they don't look at the price of certain charges, because it's just been auto done for a while. So they kind of lose track of those expenses, I guess, have you come across that yourself as well?
Shay Steacy:I've seen a lot of people underestimate what they are spending in subscriptions.
Cadeem Lalor:Right, right,
Shay Steacy:Right. I am hit this too, right, where you get like a $200 charge and your card and you're like, Oh, that was for this program that I chose to do annually last year, and I forgot that there was an auto renewal. And so is there a one timeframe that is consistent to review your cash flow? I don't think so. You know, I'm not saying every month you have to do something or every six months, but that's a really good point of... You know, if you reviewed everything and you set up a beautiful cash flow system two years ago, it probably needs to change now. You're either earning a different amount or inflation has happened. And, and that is different as well. And your values may have changed between now and the last time that you reviewed things.
Cadeem Lalor:All right, thank you.
Shay Steacy:My pleasure.
Cadeem Lalor:So Bethan, I'm wondering, how did you learn about financial literacy?
Bethan Moorcraft:It was 100%. Through my parents, I would say we didn't really talk about the principles of growing wealth, it was much more about the principles of kind of basic healthy money management. I had absolutely no financial education at school, which I think a lot of people my age would agree with. To the point that I went to university and it was literally the first I've ever played a water or electricity bill myself, and I had to figure out how everything worked and how to split the cost with my housemates. And, and it was an interesting experience. And just like thinking about it, it's odd because you learn so many things in school that you actually never use in everyday life. But you don't learn about personal finance, which is something that impacts you every single day. So looking back, I wish I was taught about taxes, or interest rates, investing, mortgages, because these are all things that I've had to learn along the way, as a young professional. And really, I wish I'd learned a little more a little earlier. Cadeem, how about you?
Cadeem Lalor:I think my experience pretty much mirrors yours. So not learning much in high school or elementary, I think my parents tried to give me some basic understanding of things. But honestly, a big piece of it was just going away from home for the first time, renting a place myself having a small budget and try to make that work, trying to, you know, go out and have fun, but also be able to afford groceries, aside from just rice, and you know, maybe ramen. So I think that was basically a very enlightening experience. And even now, I guess, kind of having first home and so forth. As things happen later in life, I'm still learning a lot. And I feel like there are times like, I wish that there were some simple things, such as investing and so forth, that I'm kind of clueless about going in, it'd be would have been nice to be able to learn some more about that earlier on. So I think there's definitely more of a push, now I feel like to kind of teach that I think, you know, we're too old to really benefit from it now at this point. But there has been more of a push by, you know, different school education systems nationally, provincially, to add financial literacy programs, and in 2019 education minister Leche made it mandatory to include more of that in career studies courses for grade 10. And there's been some provincial offshoots as well popping up with some mandatory financial literacy courses. But there's still definitely ways to go with that.
Bethan Moorcraft:Yeah, I think that's fantastic. I think it's great that they're introducing that in schools now. And I hope that young people take advantage of that, because hindsight is a beautiful thing. But there we are. So joining us today to talk about financial education is James Battiston, a staff reporter with Moneywise. James, welcome.
James Battiston:Hi, thanks for having me. And it's really interesting. When you look at financial education and financial literacy, it seems to me that there is a disconnect, and that leads to a lot of financial troubles. Scotiabank, they sent out a poll, and they found that 81% of Canadians felt that the financial world was confusing at present, and only 39% of those who were surveyed, said that they would actually go to a financial advisor for help. And it says to me that when you're looking for someone to go to for good advice, when you don't have the knowledge yourself, you're struggling, you're you're not well equipped to understand the complex financial world.
Cadeem Lalor:I guess I was wondering, then who do you try to turn to? Or how can you try to educate yourself? I guess, with so much information out there.
James Battiston:it's really hard to know who to trust, you can turn to Google, you can turn to influencers, whatever the case, but the information that you receive, you aren't sure where it comes from, it can be biased, it could be sponsored content. We don't see what's behind the curtains of those things. Myself, I just have a financial advisor that I work with and trust to provide me with healthy financial choices. But I'm very fortunate, and I've had them since I was like 12 or 13, which I think is uncommon for most people?
Cadeem Lalor:I think so, too.
James Battiston:Absolutely. It's difficult to find the proper person that you connect with, when you are looking for financial advice. You really have to understand what you value when you're looking for a financial advisor, you know, is it really important for you to invest in green energy, natural carbon offsetting businesses and industries? Or are you more interested in saving for retirement, saving for your children's education. What those priorities are, and once you have an idea of that you can create a better path to your financial well being. But again, comes back to financial literacy and financial education. You really do need to be familiar with what is out there. If you're looking for advice, I mean, the first thing that I would do is check someone's credentials, you want to make sure that they have the proper certifications, the proper background, the proper foundation of knowledge themselves that you may not have. If you are going to a financial advisor, you'd want to find someone who's a fee only that means that you pay them, they give you the financial advice, there are other ones that are commission based. And the danger there is that they can be influenced just as much as like someone on Google or Instagram or TikTok, they could be getting a cut from a business corporation. In terms of a financial planner, that's a different thing. A financial planner has certification, and you will want to make sure that they have the appropriate certification. If you're questioning a person's credentials, be sure to research them, check out the FP Canada website or give them a call. Or you can talk to the Financial Planning Standards Council, they will tell you if the party that you're dealing with is legitimately certified. And that's very important. You can also check out the Investment Industry Regulatory Organization of Canada, which is a mouthful to find out if there have been any complaints against the person that you're looking to work with.
Cadeem Lalor:Because I do feel to like with the having one at 12, 13, you almost sort of inherited it, I think there's a bit of trust built in probably a relationship built in over a longer period of time. So I think that definitely helps. And it's kind of at odds with how the average person might have to go about getting someone new, you know, maybe just going online, maybe just going to their bank kind of trusting the random person, they're paired with their knows what they're doing.
James Battiston:That's exactly it. I mean, I inherited my parents financial advisor, basically, and never questioned it. So my financial education, my financial literacy, as yours basically comes from my parents, there was some taught in school. But at University, I was an art student, I didn't have that business background, that economics background. In high school, and before that, there was a bit of financial education happening, but not enough. And I really think that the government's push to kind of get more financial education integrated into the classroom is really important. And I'd highly suggest that any individual, really familiarize themselves with the basics just to get a foundational understanding, you don't have to understand you know, the intricacies of economics. But having that ground from which to build up on is really important to increase your financial literacy. I mean, there are some great resources out there. The government website, canada.ca has a great database of resources available that you can check out, many of which are free, if not all. The big banks, they often offer financial literacy information. And you can talk to people at the branches and whatnot and get a basic understanding. Again, they might not be fully certified, but they have a general understanding. One of my favorite places is going to your local library to get information. In Toronto, there's a financial empowerment program that helps people get a grasp on their financial matters. It was developed with Prosper Canada, which is available throughout the country. And that's a charity founded in 1986, designed to help people who were navigating poverty.
Bethan Moorcraft:It's great that there are so many free resources out there for people today.
Cadeem Lalor:Thank you for that information. Thank you for joining us.
James Battiston:Thank you very much.
Cadeem Lalor:So Bethan, do you think you're going to trust someone with your money now?
Bethan Moorcraft:You know what, I think I will come to the conclusion that a second opinion can definitely go a long way. But I'm going to be careful about where I get that advice. I do love to scroll social media. But perhaps that's not the best place for me to plan for my financial future. Cadeem, what about you?
Cadeem Lalor:I think what I've taken from this most is that you don't need a specific amount of money or what you view as a large amount of money to get involved with a financial advisor. It's really more about identifying your good habits, identifying the bad ones and basically avoiding crypto bros.
Bethan Moorcraft:So I can't interest you in buying an NFT of my dog
Cadeem Lalor:Maybe before this episode I would've been all over that. So appreciate it, but I'll pass.
Bethan Moorcraft:Fair enough. And that was Half Banked. If you like this episode, be sure to subscribe rate and review us on Apple Spotify or wherever you're listening to this podcast.
Unknown:Special thanks to executive producer Samantha Emann and producers Kevin Hamilton, Jenny Potter, Shane Murphy, James Battiston, Mary Alcober and technical producer Muhammad Tabish. This episode was edited by Vocal Fry Studios