How advisors can help clients in a heightened state of financial stress

Sybil Verch outlines the issues Canadians now face and how financial literacy can help

How advisors can help clients in a heightened state of financial stress

Canadians are still in a state of heightened financial stress. It’s something advisors know from their conversations with clients, Canadians know from that feeling they get at the grocery store, and analysts know because FP Canada’s 2023 financial stress index found that, for the 6th year running, Canadians say that money is their top source of stress.

While some of that stress is beyond the control of any individual, Sybil Verch believes that financial literacy education can play a significant role in turning those stresses and feelings of crisis into something manageable and actionable. Verch is a financial advisor and portfolio manager with Raymond James in Victoria, B.C. and hosts The Wealthy Life, a TV show on CHEK and Global Television aimed at engaging Canadians on financial topics.

The first episode of her seventh season aired this weekend. Ahead of the premiere, Verch talked to WP about the financial stresses she sees Canadians facing, the topics she plans to cover in the new season of her show, and how Canadian financial advisors can play a role in advancing the cause of financial literacy.

“Financial stress is not something new. We’d like to blame it on the current interest rate environment, high inflation, high debt levels, but I think financial stress has, for a long time, been the number one cause of stress for many Canadians,” Verch says. “Now, the problem is getting worse as people keep racking up more debt, living outside their means, and facing tough economic times with high inflation that just compounds the problem.”

“I think the solution often boils down to the basics of living within your means…It equates to a healthy lifestyle. If somebody wants to be in good shape, they know they have to exercise, eat well, and get adequate sleep. Do they do those things though? Not always. With financial stress there’s the knowing what you need to do, and actually executing on the actions you need to take.”

Verch acknowledges that in many cases, sources of financial stress are outside of individuals’ control. Losing a job, being diagnosed with a critical illness, getting divorced or dealing with the death of a spouse are a few examples. However, learning to control what you can and developing plans to protect against potential unforeseen circumstances can help people control their sense of financial stress. Financial advisors, Verch says, can help their clients make those plans and shift their habits towards better financial outcomes.

Read more: Canadians wish they knew more about their finances | Wealth Professional

The most important role an advisor can play in helping their clients deal with stress is that of an educator and an accountability partner, Verch says. She cites a client survey conducted by Raymond James last June which asked clients what they want from their advisors. The survey found that demand for financial educational opportunities was high.

49% of clients surveyed wanted to learn more, Verch says, so they could feal more empowered and knowledgeable in their decision making, enhancing their financial life Those requests for education were quite specific too. Clients said they wanted greater knowledge of tax savings strategies as well as trust and estate planning.

While not every advisor has their own TV show to serve as an educational platform, Verch says they can follow an 80/20 content strategy to educate their clients. Only 20% of the information you send to clients needs to be your own original creation. The remaining 80% can simply be a curated roster of sources and voices you agree with, that you think can provide your clients with the knowledge they are seeking. By offering those educational resources, an advisor can also ensure their clients come into meeting better informed and better able to advocate for themselves, creating an overall better outcome.

Season seven of The Wealthy Life, Verch says, should help provide more Canadians with a foundation of financial literacy. She believes advisors can use the show, too, to assist with their own targeted educational efforts. This season will explore topics like side hustles for cashflow, boosting confidence in asking for raises, promotions, or seeking new jobs, and how to rein in expenses as well as tax saving ideas and estate planning strategies This season has 13 episodes, each of which will address four specific topics. Verch thinks that as advisors and investors seek to deepen their financial education resources, her show can help.

“Each segment can be something that advisors can share with their clients to educate them on important topics that they think their clients would find interesting and could benefit them in future,” Verch says. “This is something I do separate from my role at Raymond James, it’s my giving back piece to help Canadians feel in control of their finances, to reduce stress and live their version of a wealthy life.”