Chaz’s Personal Gybe: Launching a Financial Planning Business
You are doing what??? oh… interesting… good luck!
After a period of deep contemplation I recently shared with my personal & professional network my decision to launch Gybe and their reaction was curious, supportive, and perhaps a little surprised.
If my goals were to maximize my income or professional clout I’ve taken a pretty significant turn off the well worn path of working at a prestigious consulting firm, getting a MBA, and then rising through the corporate ranks.
I strongly believe there’s more to life than money and status, at the same time money can be an incredible tool in helping you get the most out of your one precious life.
Gybe will be my conduit for helping others get their finances working for them in a way that lets them live their most authentic lives (whatever their goals may be).
For those who are curious to learn why a strategy consultant to leading pension plans & investors is jumping into personal financial planning, I’ll break down my logic in a 5 section bullet-pointed framework like a good consultant would do :).
My intention with this blog will be to focus on delivering valuable insights to my clients and broader audience but this first blog post is admittedly self-indulgent (and hopefully a reminder I can look at in tough times).
1) I’ve always had a deep interest in personal finance and expect my passion and knowledge to compound:
I am a personal finance nerd through and through. I voluntarily subjected myself to the QAFP exam (~300 hours of coursework before deciding to make a career of this) and was captivated with tax planning module.
I’m also fascinated by how people in similar situations can have completely different goals and financial outcomes.
I’ve been able to find that wonderful bliss of “flow” in the financial planning work I’ve done to date and I hope that never fades.
My family has been consistent savers and disciplined evidence-based investors for many years, part of what has made starting Gybe possible
2) There is a tremendous opportunity to deliver impactful, conflict-free, advice in Canada:
I will make a dramatic oversimplification of the Canadian Asset Management landscape below to illustrate a point, no offence intended! Across all models there are great firms and great advisors! (More blog posts to come here).
The “Old Way”: Hire a bank financial advisor (or large investment firm) whose service is primarily focused on investment management. This approach can come with a trusted long-term relationship, personalized advice, and behavioral support to navigate the market’s inevitable ups and downs. The challenge is relatively high cost that can often be embedded in high product fees. (80% of Canadian’s privately held investment funds were held in mutual funds (~1.8 Trillion Dollars in assets as of 2020) with an asset weighted management expense ratio (MER) of 1.7% per year). FP Canada’s return assumptions for a balanced portfolio before fees are approximately 5.3% so 1.7% means nearly 1/3 of projected returns are lost to fees (not great when compounding over a lifetime!). The other issue is that the quality and depth of non-investment advice that is anchored in a financial plan is variable in this channel, for example <15% of advisors in Canada registered to sell investment products hold the CFP or QAFP designations.
The “New way”: Transfer your investments to a discount brokerage or Robo-Advisor and build yourself a low cost portfolio (Haven’t we all seen the Questrade adds), this can certainty lower costs but shifts the onus on the investor to remain steadyhanded through market cycles, and leaves them turning to the internet for managing the other elements of their finances like saving, managing taxes, planning for retirement etc. Study after study has shown that individual investors make sub-optimal decisions and typically fail to achieve market level returns. So while you may get lower fees, it takes a special level of knowledge and temperament to get great outcomes.
Gybe and other financial planning focused firms seek to offer a “Better way” (for many Canadians): The client pays directly on a fixed fee/ or hourly basis to get personalized advice in the context of a financial plan with no product sales. The client can implement a low cost, globally diversified investment portfolio that is suited to your goals with the confidence that their plan is aligned with their goals and behavioral support along the way.
Finally I’m grateful for the Financial Planning Association of Canada and specifically the advice only planner community who have blazed a trail under this new model, demonstrating that Canadians value and are willing to pay for this advice. This way of practicing is still rare but not completely unknown: Of the ~20,000 FP Canada Approved Financial Planners less than 2% are practicing in an advice-only model. I have found many mentors eager to share tips and business practices.
3) Financial planning aligns with my “talent spikes”:
A career in consulting is great for getting lots of pointed feedback on what your professional strengths are, I have been described as:
Being highly analytical, retaining lots of information, and slotting that into the big picture of what we are trying to accomplish
Being patient, trustworthy, and generally optimistic with the people I interact with
Having a knack for teaching and coaching and breaking complex concepts down in a practical and understandable way
Having a bias towards action, and getting stuff done in the context of resource constraints & competing priorities
4) My professional experience and network will bring a unique and well-rounded perspective:
I have advised some of Canada’s largest and most sophisticated investment funds, the odds are stacked against us retail investors so we need to keep things simple!
I have spent the last ~3 years working closely with some of Canada’s largest Defined Benefit pension administrators and built an in depth understanding of how pensions (and their administrators) work
I have the technical acumen for robust financial planning: Top score on QAFP exam, MBA in Finance, and I worked as a teaching assistant for accounting courses during my undergraduate degree
I worked as a corporate executive at a fortune 500 company for several years, I know what it’s like to have may competing priorities and need simple and clear advice
I have started and managed my own incorporated business, optimizing cash flows and corporate investing
5) Both the Journey and Destination are exciting:
Personal financial planning is not likely to be as financially rewarding as consulting, However I expect to draw deep fulfillment from helping my clients meet their goals
I am excited by the prospect of building a business where I can serve clients in a way that is values aligned and maintains my personal balance beyond work
I plan to build Gybe into an enduring organization that outlasts myself and positively impacts many Canadians but am open to the inevitable twists and turns along the way
Finally I’m incredibly grateful for the rewarding career I’ve had to date and the support from my wonderful wife, family and friends to take this leap at a time where most folks my age (especially parents of with children under 5 like myself) are overwhelmed by their personal and financial responsibilities.
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