found that paying off debt was Canadians’ top financial priority for the 10th year in a row.
“Once we determine what [the debt is], we determine whether we can put a strategy in place to either pay off that debt or, in some cases, not worry about it,” he says. In fact, he says advisors need to place a bigger emphasis on liabilities during conversations with clients rather than focusing solely on investments.“A lot of advisors are focusing on the investments. ... But if you’re a client paying 20 per cent interest on your credit card, I don’t think you should be investing at all,” Mr. Golombek says. “Ultimately, if we can get you out of that situation, we can set aside more money in the monthly budget toward achieving the other real goals.
As with all client situations, the process begins with creating a plan, Ms. MacDonald says. In cases that involve substantial debt, tailored solutions often lead to better results than textbook approaches, as the reasons behind that debt can be very different. For example, one client may have liabilities after dividing debts in a divorce, while another may be dealing with a gambling addiction.