The #1 Pain Point For Clients

I have heard this sentence many times, which doesn’t vary much during client meetings. “I know that document you need to look at is in a box/pile/that room/somewhere.” If I have not prepared the client ahead of time off they will then go to find the required paperwork.

Financial planning involves looking at all aspects of your financial situation, because the interconnectedness impacts your ability to achieve your future goals. If while looking for that required document that helps clients own that truth then it is time well spent.

Organization of financial paperwork is the #1 pain point for clients. It is in part due to how busy we are in our lives and of course the not inevitable procrastination.

Believe me it is easy to procrastinate on the organization of documents and only deal with it at a specific time, such as when I show up, or tax time, or when the bank asks for it. But serious life events happen at unexpected times. You do not want to be hunting down your papers during a time of severe stress.

The only reason the task of organizing your financial documents is so gruesome is that people let it pile up! They have far too much paperwork!

So here is a short how to stay organized list which in turn will give you peace of mind.

First off storage: I recommend a 2 drawer filing cabinet. I can see the puzzled look on some of my younger clients’ faces. Somewhat akin to the chequebook, filing cabinets could be considered relics from the dinosaur era. An accordion file folder is a poor substitute, mainly because it can be misplaced. But choose one or the other.

I recommend a 3 ring binder for your tax returns. Binder? Is that even a thing anymore?

So here are the only documents you should be storing. And don’t forget in this digital age Evernote and Dropbox can be a big help.
1. 6 years’ worth of tax returns and 10 years of tax assessments.
2. 6 months to 1 year of bank statements. (Some banks are forcing you to go digital)
3. 1 year of investments statements for each account. RRSP TFSA RESP etc. Note I can always get documents from past years.
4. Insurance policies, life, car, house. Especially important when you need to make a claim (see above regarding unexpected life events.)
5. Benefit handbooks for your CURRENT employment, medical, dental, short term disability.
6. Receipts for tax filing, such as medical expenses, child care, or tuition.

Twice a year AMA has their FREE shredding event. After you have performed your purge take the unwanted documents to be securely shredded if you do not own a shredder already.

Also I know the beginning of this task can seem so dreadful that you put it off in favor of a more fun activity such as vacuuming or washing your car. Why not get started by saying you will start sorting and banishing for a half hour? And a half hour next week. Don’t be like someone I know well who leaves all his ironing for one day in a year and irons for 8 hours straight then complains he doesn’t like ironing. Get started but also be good to yourself!