This post may contain affiliate links.
My life is busy. Crazy busy. And I know yours is too. Between the skating lessons, music lessons, preschool, school meetings, church groups, side-hustles (Bloggy McBloggerson), and my wife doing her Masters, I don’t have much spare time. And I haven’t even mentioned my full-time job!!
That’s why when I came across a company called Planswell on Twitter with a tagline: “Get a free financial plan in 3 minutes” I was intrigued. Intrigued enough to invest 3 minutes of my time to do something I’ve been wanting to do for several years.
The Best Intentions
I’ve wanted to get a financial plan done for a while now. But I’ve always been faced with a conundrum. I knew that if I invested with a financial planner who sold mutual funds, a financial plan would be included with the service I received. But, I didn’t want to pay an exorbitant amount in investment fees (pro tip: high fees are a MAJOR drag on your investment returns).
In addition to that, I wasn’t crazy about getting “unbiased” advice from a broker who was getting commission if they sold me the funds they were recommending (conflict of interest much!).
It’s not that people who sell mutual funds are crooks or bad people. They’re not. They’re just human. And biases will impact their decisions. It’s just human nature.
The second option as I saw it, was to hire a fee-only financial planner. A fee-only planner is usually paid a flat rate, or in some cases by the hour, by the customer to give unbiased financial advice. The services they provide include putting together a comprehensive financial plan and making recommendations for steps to take to shore up one’s financial situation (insurance, debt, investments, education savings, taxes, etc.). In addition, because they don’t sell anything except their expertise and advice, they don’t receive any commissions from the sales of products.
I liked the sound of that. Unbiased financial advice from a professional who only had my best interest in mind.
A Scottish No-Brainer
Unfortunately, this advice doesn’t come cheap. Fee-only services can cost into the thousands of dollars, depending on the complexity of the plan required and the advisors level of expertise.
I REALLY wanted a financial plan, but I’m Scottish. I hummed and hawed, but never pulled the trigger.
So when I heard about Planswell, it was a no-brainer for me to give them 3 minutes of my time.
GIVEAWAY ALERT: TAKE 3 MINUTES TO GET YOUR FREE FINANCIAL PLAN AND YOU’LL BE ENTERED TO WIN 1 0F 20 STARBUCKS GIFT CARDS. AND, IF YOU DECIDE TO SIGN UP WITH PLANSWELL, THEY’LL GIVE YOU A $200 AMAZON CARD!! NOTE: IT’S OPEN TO CANADIAN RESIDENTS ONLY AT THIS TIME (SORRY MY AMERICAN PALS)
When you get to the Planswell site and you click to build a plan, you’ll be asked to answer a series of questions about your current financial situation. These range from how much do you make a year and how much do you have saved in RRSPs or TFSAs, to do you currently have life insurance, with several questions in between. They are all easy questions you can answer off the top of your head.
After you’ve filled in all of the information, including your phone number so that a Planswell representative can get in touch with you, just click submit.
This is really where the magic began.
The Planswell Experience
Without a word of a lie, not 10 seconds after I clicked submit, my phone rang.
The caller ID said Cameron Kilvert. I picked up.
“Hello?” I stated and asked all at the same time.
“Hey Matt, my name is Cameron Kilvert and I’m from Planswell. How are you doing today?”
“Good,” I replied, still shocked that I had received a phone call that quickly after hitting submit.
“I’m calling in regards to the financial plan that you completed and wanted to chat a bit more about it with you.”
O.k., wait a second. This was pretty slick. A little too slick for this guy. One thing you have to know about me. I hate getting ripped off. I hate getting scammed.
I’m a huge skeptic when it comes to most things. Ask my wife, it’s true. I know that if something seems too good to be true, it usually is. I’ve learned that lesson the hard way.
My BS radar was on high alert as I began to chat with my new PlanPro Cam. Not because he seemed shady or the website had lots of red flags.
No, it just seemed to good to be true. I’d never heard of a company doing free financial plans for people.
The Most Important Question To Ask Someone Giving Financial Advice
The first question you should ALWAYS ask someone trying to offer you financial advice or sell you a financial product is, “How do you get paid?”
“How do you get paid?” I asked Cam in a non-accusatory but slightly confrontational way. I wanted him to know I wasn’t some financial neophyte he could take advantage of.
“Part of what we offer is a robo advisor service. We charge a fee for that service and that’s how we get paid.”
Aha! I had him. Now it was all making sense. They only sold their in-house brand of high priced mutual funds and that’s how they were able to fund this operation and line their pockets.
The first question you should ALWAYS ask someone trying to offer you financial advice or sell you a financial product is, “How do you get paid?” Click To Tweet
The second question you should ask someone trying to sell you an investment product is what products they are allowed to sell you. Most “salesy” financial planners can only sell you their company’s brand of mutual fund. These have MUCH higher costs that low-cost Index funds or ETFs.
Two of the giants in the Canadian low-cost Index funds and ETF space are Vanguard and iShares (run by Blackrock).
“Are you guys only allowed to sell your in-house brand of mutual funds or can I buy low-cost indexes and ETFs from like, Vanguard or Blackrock?”
This was the question that would topple the house of cards on which Planswell was planning on building its empire.
“It’s funny you mentioned Vanguard and Blackrock specifically because those are the two companies we use to build our model portfolios.”
Had my ears deceived me?
Was I hearing correctly?
They were using Vanguard and Blackrock to build their portfolios??
The Fees Knees
“So what kind of fees do you guys charge?” I asked a bit stunned and trying to gather myself.
“There is a $500 minimum account balance. Up to $5,000 is free for the first year. From $5,000 to $100,000 we charge 0.5% and over $100,000 is 0.4%.”
This made sense.
It was higher than what you’d pay if you were a DIY investor. But you were getting the robo advisor service and a financial plan.
It’s the exact same fees that robo advisor giant Wealthsimple charges. Except with Planswell, you get a FREE financial plan which looks not just at your investment portfolio, but also at your insurance needs and debt situation. Planswell’s services are far more comprehensive than those of solely robo advisors.
Nest Wealth has a slightly different fee structure, one that is based on a monthly subscription.
Nest Wealth= $20/month minimum description; $80/month max
When it comes to finding the lowest cost way to invest, there are cheaper options. If you’re comfortable with DIY investing, you can find ETFs with costs as low as 0.1%. You will have to pay for transactions fees, though some online brokers have discounts or will waive fees for a period, or when buying ETFs.
So how do the actual costs shake out?
Assume you have $10,000 invested.
|Company||Percentage Fee||Annual Cost|
Note: All of these companies invest in ETFs which also have an MER embedded (about 0.14-0.18%). This is charged in addition to the fee listed here but is a standard fee amongst these companies.
With Planswell, however, when you factor in that you are getting the robo advisor service, plus a free comprehensive financial plan, it’s a great value and a no-brainer.
In fairness to Nest Wealth, as you have more invested, it becomes a better deal.
But for consumers looking for both a robo advisor service and financial planning advice, Planswell takes the cake.
The Planswell Financial Plan
During the rest of that first phone call, the PlanPro chats with you about past experiences with financial advisors, and banks in order to try to understand where you’re coming from.
They’ll also discuss what your short and long-term goals are in order to understand where you are in life and where you want to end up. This information is used to tailor your plan to meet your specific needs.
Finally, you’ll set up a time to speak again in about a week.
At that second call (at which Cam called literally seconds after our scheduled 7:30 time. I know because I was so impressed with the first call back that I was paying attention and wanted to show my wife how punctual Planswell was), you’ll briefly review your goals and be asked if there’s anything else would you like to get out of the call.
Then, you’ll go over your plan.
Cam will actually share his screen with you and he’ll walk you through the whole thing, step by step. Their patent-pending software, which took a year and several million dollars to develop, will analyze your entire financial situation and make recommendations tailor-made for you.
You’ll look at any gaps and vulnerabilities you have, and go over where your current rate of savings will leave you when you hope to retire. Their aim is to educate people and point them toward the best options moving forward so all your financial actions are perfectly aligned with your personal goals.
Planswell Insurance, Debt, and Investing
You’ll explore your insurance needs based on the insurance you have through your employer and outside of work. Cam will tell you what the plan recommends and refer you to an insurance specialist with Planswell. The system is so slick that you can get approved without ever leaving your house. Or, if you prefer, you can use an insurance company of your choice. Planswell really wants to avoid any conflict of interest. You take the advice in the plan and decide how and where to put it into action. There is no obligation to use Planswell’s services.
Next, you’ll go over options for reducing debt. This may include possibly refinancing your home to consolidate debt (you’ll factor in any penalties for refinancing early), paying off credit cards and taking into account the interest rates on all your debts.
Finally, you’ll talk about your investment needs and how best to be saving for the future.
Note how this is not the first item you talk about as you discuss your financial plan.
If you were to call up a robo advisor and say you wanted to invest a $20,000 inheritance you’d received, they’d say, “Awesome! Let’s do it!”.
They wouldn’t ask about your insurance needs, and they most definitely wouldn’t tell you to pay off your debt.
But Planswell will. They’re not like every other robo advisor.
A Different Model For Giving Financial Advice
The advisors at other financial institutions get paid on commission. This means if they sell you insurance, investments, etc., they get paid, and they get paid more if they sell certain types of insurance or investments with better commission rates.
PlanPros are paid a salary, not commission. Any fees from products used go directly to the company and not the individuals. This setup is in place to avoid individual agents trying to push products on customers that will make them more sales commissions.
Finally, at the end of the call, Cam will send you a summary email with the next steps the plan recommends you take. And like I said, you can use the companies that Planswell recommends, or choose your own.
No conflict of interest.
At a minimum, they’ll call you every 6 months to update your plan with any significant changes that have taken place in your life (birth of a child, change in job, etc.). Cam even told me that he calls some people every couple of months to hold them accountable for the steps they said they were going to take, like paying off their debt.
He doesn’t have to. But he cares.
Planswell employees are made up of former advisors, bank employees, and people from the financial services industry who want to give advice to consumers in an unbiased fashion. They use their past experiences in banks and mutual fund companies to connect with customers and build credibility.
They care about their customers and genuinely want to provide a valuable service to help them.
But Planswell isn’t a charity.
Many of the investors in the company are ex-bank executives. They’ve seen the business model Planswell has introduced, and the cutting edge software used to develop the financial plans, and they want to get in on the ground level. They believe, not only with their hearts but more importantly with their wallets, that this is the future of personal finance.
Bringing It All Together
In the past financial plans have been primarily the domain of the rich. Sure, some “regular folks” had them, but very few members of the working middle class had the resources, let alone the time, to implement a financial plan.
For many people today their idea of a financial plan is making it to the next paycheck.
Planswell is hoping to be a part of changing that.
For Canadian Method To Your Money readers, take 3 minutes to create your financial plan and you’ll be entered to win a Starbucks gift card from Planswell. And, if you implement a plan, you’ll get a $200 Amazon gift card and your first $5,000 managed free for a year! And, as a bonus, you’ll work directly with Cam on your financial plan! Check out Planswell today!