I had the opportunity to speak with Jason Heath, the Managing Director at Objective Financial Partners Inc. and a financial journalist, and we had a great conversation about the investment industry and where it’s heading, as well as the things he’s most excited and most concerned about. Here’s how it went:
Jamie: You’ve been in the financial services industry for about 20 years now. You also write for the Financial Post and MoneySense. What is it that first interested you in the financial world?
Jason: I actually started studying theatre back in University, I was planning to be an actor believe it or not. I realized 1 week in that it wasn’t a good fit but interestingly my classmate Rachel McAdams had a different experience. Anyways, I switched to economics and financial services seemed like a good place to apply my economics knowledge. After school I went into banking for few years and then realized fee-only financial planning is what I wanted to do.
Jamie: What are the biggest changes you’ve seen in the industry from when you started out to today?
Jason: The biggest change in the investment industry has to be that the primary way to invest used to be mutual funds with a 2% to 2.5% expense fee. In the last 15-20 years, the industry has really evolved to a place where it’s not just banks and mutual fund companies letting people invest their money, there are a ton of smaller, independent firms as well as fintech companies that provide an investment professional who manages your money at a lower fee and with a personalized investment portfolio. There’s also been a push for investors to manage their own money with online brokerage accounts and exchange traded funds (ETFs). This has been a significant form of empowerment which is good in a lot of ways, but can also be confusing as there’s no one size fits all anymore.
Jamie: What are your biggest areas of concern going forward?
Jason: Stock markets have performed so well over last 9 years since the financial crisis that new and younger investors may have never seen how stocks can go down, and go down a lot. I worry this may have led to an artificial confidence and when stocks do fall (like they have in the last few weeks), some less experienced investors will panic and sell because they don’t have a sense of stock volatility. On the other hand, we’re seeing a lot more DIY investment options that let people manage more of their own money with more tools, but I worry that these DIY investors may have unbalanced portfolios centred around speculative investments like pot stocks and bitcoin, which isn’t ‘proper’ investing. They could get burned doing it themselves without the benefit of professional investment advice.
Jamie: Where do you see the investment management space going in the next 5 years?
Jason: I think fees will continue to move lower, a lot lower, with the ETF industry pushing down fees on investment options and innovative products. Robo advisors and online advisors are very competitively priced now compared to banks and investment companies and fee squeezing is happening all over. Technology also plays a much bigger role in the financial services and fintech industry – everything can be done better, quicker, more efficiently, cheaper, etc. and this is helping financial institutions deliver cost effective options and narrow the gap between low cost ETFs and financial professionals.
Jamie: Where do you think there’s the most opportunity, or in other words, what are you most excited about looking forward?
Jason: First, I’m most excited about the way retirement planning is changing my business model. With the big baby boomer cohort now heading into retirement or already in retirement, there’s a lot of interest around how to decumulate assets. This is a big shift from the old focus on accumulating wealth. Second, technology is creating a lot of opportunities for the financial industry to be better, cheaper and smarter. The financial industry will contract on the client-facing front with less bankers, insurance agents and advisors, but it will grow on the tech side with a greater need for developers, etc.
Jamie: How important is technology to your practice? And how do you see technology like Onist’s household financial management platform making a difference for professionals and families alike?
Jason: I use technology in most of my client work. There’s financial planning software to crunch numbers, app’s and off-the-shelf tech, and the cloud-based software I use to share information with my clients. Tech is especially important given we’re a paperless office, we’re somewhat forward thinking in that regard. I see a real need for tech like Onist, I’ve seen first hand how hard it is to keep track of everything in one place – with my family and my clients. And as baby boomers age and adult kids get involved in assisting their elderly parents with their finances, it makes sense to have hub to share important information with siblings, clients, family advisors, etc. I see Onist as a great way for professionals and family members to come together and collaborate.
Jamie: As a journalist, what’s your favourite financial topic to write about?
Jason: I recently wrote an article about retirement spending, how much the average person spends in retirement and how your spending level changes over your retirement years. If it’s hard to know what you spend now, then it will also be hard to predict what you’ll spend in the future. But it’s helpful for people to be able to compare themselves to others. I like this type of article more than a technical tax article for example.
Jamie: What mantra do you live by?
Jason: Hmm, I’d say I’m making it up day by day, both personally and professionally. I own two companies, have 3 kids and family obligations I’m juggling – I’m flying by the seat of my pants now that I think of it. My resolution for 2018 will be to come up with a better mantra!
Jamie: If you could leave us with anything, what would it be?
Jason: From a financial perspective, knowledge is power. Most people, even those who are traditionally successful, don’t know much about finances. Anything you can do to become more knowledgeable about finances – read a book, watch business news, download a finance app, visit a website with financial insights – the better and more confident you will be.
Jamie: That’s a great point, thanks so much Jason!