Q&A with Blair Corkum
‘Everyone needs to be accountable for their own decisions’
When Blair Corkum was working on his and his wife’s financial plan decades ago, a goal was to leave Halifax and retire in P.E.I. After all, his wife is an Islander. But then Corkum asked himself “why wait?”
So, rather than wait, the couple moved to P.E.I. in 1990.
Corkum added financial planning to his accounting and tax services in the late 1980s.
Over the years, he has worked in a variety of arrangements with other professionals. But in 2014, rather than retire, Corkum went out on his own and started Blair Corkum Financial Planning Inc. in Charlottetown. Corkum offers an hourly-based fee only financial planning service in several areas, including financial divorce c ounselling.
With the new year now upon us, Corkum sat down with The Guardian this week to talk about his career and offer some tips about how to plan for the future.
Q
: What interested you about financial planning that made you want to shift to that area from accounting and tax services?
A: Many of my clients were coming in and asking me financial planning questions because I was doing their tax and accounting work. And, I couldn’t answer them. So, I took financial planning courses so I could top up my other financial advice with general advice on investing and insurance and retirement planning. (Also), I get to meet a lot of people and I enjoy meeting people. Financial literacy is not that strong among many people. So, I see a need. I understand it and I enjoy it. I get to help people out, who are quite thankful after they get a bit of education on what they should be looking at.
Q
: What is the most common thing people are not doing from a financial planning point of view that they should be doing?
A: One is this presumption that retirement will never come, so very few people are putting money away and are counting on some kind of government pension to look after them in retirement. That’s not going to work. Everyone needs to be accountable for their own decisions and for their own long-term benefit, and realize that tomorrow is coming very quickly – age 55 is getting quite late to start planning for retirement. So, not saving enough money during their best years. There’s always challenges – raising kids costs money too. But, put a bit of money aside for the future. Number two is people owning investments without understanding the type of products (and the risks) they have. I see many people with all of their money in balanced mutual funds or in some kind of equity fund, which are subject to the ups and downs of the market. If the market goes down, especially for an extended period of time, not as much of your money will be there when you need it. And so, it shouldn’t be there. Many people do not understand the stock market, and yet they have a vast majority of their money in mutual funds, which they do not understand.
Q
: Now that we’re in the new year, what should people be doing with their financial planning and investments?
A: Within the next few weeks, you’ll be receiving your year-end investment statements from your bank, from your broker or from wherever you have your money invested. So, now is the time to sit with your broker and compare your performance to the market average to see how you did. There are some people making more than the (stock market) average and some less than the average. Which half are you in and why are you there? You want to be in the above-average group. If you’re in the belowaverage group, you need to know why, and look at whether you need to make changes in your portfolio. Now is also a time to look at your portfolio (and forget the performance) and look at what money do you need for the next seven to 10 years. Is it time to shift some money around? Do you have children going off to university? Or, are you planning to retire? It’s just a good time to reassess, because when else will you do it? If you have losers in your portfolio, now is the time to sell them.
Q
: Is there a magic number or specific amount that everyone should have saved in order to retire?
A: Absolutely no magic numbers for retirement. It depends on your lifestyle. I have seen people with financial plans that their annual expenses are $30,000. I have seen other people who have annual expenses of $100,000 a year. So, to maintain your lifestyle, the question is ‘how much do you spend annually?’ And, ‘how much is appropriate to set aside for emergencies?’ You need to look at your budget and what you can live on.
Q
: You mentioned to me before that you’re getting calls about investing in the marijuana industry. What is your advise on investing in that industry?
A: It’s a hot topic these days. There are publically traded shares in cannabis companies. I’m not licensed to talk about specific investments. I can only talk about generic. But generically on a cannabis investment, it would be the same advice as any other type of investing you do. You need to look at the quality of the company, the quality of the management (and) the market. And, there just isn’t enough evidence around any of that because the market does not yet exist – legally. So, it’s a very, very speculative high-risk investment to make, at least at this stage. Any company as a startup is a very high-risk investment. But, for most companies, there is already a market out there somewhere and they’re just trying to compete in that market. As a whole, unless you have money to throw away, and some people do, that would not be an appropriate investment for the average person.