The Do-It-Yourself concept may work very well for building a deck in your back yard, but it may not have the same level of success when it comes to financial planning and investing. This reality was proven in early June when the National Bank of Canada announced it would be purchasing the mutual fund management company, Altamira Investment Services Inc.

Throughout the nineties Altamira became known as the best source for investors to do it themselves and successfully invest in mutual funds. There were no “middle men” to deal with, all the funds were performing well and anybody could make money investing in Altamira’s mutual funds.

This concept worked very well while Altamira posted strong performance numbers. Once the numbers started to show signs of weakness, the problems began. Clients were on their own to deal with the stress and emotion of realizing that they were losing money. The result was that money started to flow out, instead of in the door.

While Altamira was suffering, competing mutual fund companies were growing their business with the help of financial planners and advisors. Planners assumed the role of coaching their clients. They gave advice to their clients and helped them understand the ups and downs of the markets and the value of diversification.

Leave the D-I-Y concept to the seasoned investor. Advice has paid off for the vast majority of people who work with a financial planner. The key to a successful relationship with an advisor is to establish a clear understanding about what you want and expect from each other. Formulate your relationship based on more than performance numbers. This will not eliminate market volatility but it should set the parameters under which you can tolerate market movements.

This is a monthly article on financial planning. Call or write to Rick Sutherland CLU, CFP, FDS, R.F.P., of Fundex Investments with your topics of interest at 798-2421 or E-mail at rick@invested-interest.ca.