Herman Chan became a certified financial planner in 2018 and launched his own firm, focused on medical professionals and real estate investors, late last year.Supplied
In Behind the Advice, we ask advisors about their relationship with money from a young age, lessons learned over the years, and how those experiences influence the advice they give clients today.
Herman Chan, president and certified financial planner at Crimson Financial in Toronto, talks about his big day as a sports reporter, regretting the variable-rate mortgage he took out in 2021, and why more young people should consider financial planning careers.
Describe your upbringing and how it shaped your relationship with money.
I was born in Vancouver, and my younger brother and I were later raised in nearby Port Coquitlam. My dad was a waiter at an upscale restaurant near English Bay, south of downtown Vancouver, before becoming an accountant in his mid-30s. My mom worked in retail. My parents were very frugal; if they didn’t save for something, they didn’t buy it. Saving was drilled in my head from a young age, and I still ‘pay myself first’ to this day.
My parents have travelled more than any set of parents I know, despite having never grossed more than $100,000 in a year in their lifetimes. So, they’re an example of frugality and financial savvy. They had a really good financial advisor – my dad hired him when he was around 40 – before I took over his accounts 11 years ago.
Did you have any experience with financial advice growing up?
When my dad was in his late 40s, he was approved for life insurance but declined for critical illness insurance. A few years later, he had a stroke. As a result, I’m a believer in actuarial science and a big believer in life insurance. My dad retired at 62 when he found out he had liver cancer. The doctor told him he had a year to live, so he moved to the Toronto area to be near my brother and me. That was 11 years ago, and he’s still with us.
What did you want to be growing up and how did you get into financial services?
I wanted to be a sports reporter or anchor. I took journalism at Carleton University. In my second year of university, I had a press pass to an NBA exhibition game; I interviewed Vince Carter at the peak of his popularity and then-NBA commissioner David Stern. So, I did accomplish my goal of being a sports reporter for a day.
During university – and for a few years after – I worked as a commissioned sales rep at Future Shop. I then went to a job fair and was recruited to work in subprime lending at HSBC. I then jumped over to RBC and learned about life insurance before joining London Life (now Canada Life), at which I worked for about 15 years.
In 2018, I became a certified financial planner and, late last year, launched my own firm focused on advising medical professionals and real estate investors.
What’s the biggest money mistake you’ve made?
The one that really stands out is getting a variable-rate mortgage to finalize my separation from my ex-wife in 2021. I had to find a way to get the equity out of the house to pay out her share. I’ve mostly had variable-rate mortgages but, at the time, I could’ve gotten a fixed-rate mortgage at 2 per cent, which was a once-in-a-lifetime deal. It was a stressful time, and I was so focused on getting the agreement finalized that I wasn’t thinking straight. As a practising CFP, I have no excuse, so that’s on me. I ended up paying more than $70,000 in interest in the two years that followed. It was a very expensive lesson.
What money decision has made the greatest impact on your life?
Understanding that time is finite and can be an unbelievable ally, just like trusting in the global capital markets. I’ve been investing since I graduated from university and it has served me extremely well – from buying my first and only house, building a sizable nest egg, and having enough for both of my children’s education when they need it. Accepting volatility as the price you pay for great long-term returns really is like magic.
What are you best at when it comes to your own finances?
Goal-setting and risk management. I’ve updated my financial plan regularly since I got access to a software called Naviplan back in 2011, and my life has been a bit of a roller coaster so far (marriage, kids, divorce, rebuild). I also got all the insurance I needed (disability, critical illness and life) in my early 30s. I eat my own cooking, know I’m on track toward my goals and am very motivated to help other professionals do the same for their families.
What’s the best piece of advice you’ve received in your career?
It’s a catchphrase and the title of Bruce Etherington’s book, See the People. It was the bible at London Life, at which he used to work. The advice is as it sounds: Find and meet people, figure out their needs, offer to solve a problem, provide value, and follow up. I’m acting on this advice even more today as I build my new business.
What advice do you have for someone who wants to work in your industry?
Reach out to a few experienced CFPs and learn their stories. There are way fewer young people entering this part of the financial industry, and I believe it’s the best and most impactful part. What other careers can you do for decades, get better at as time goes by, and make a meaningful impact on families and communities?
Which famous person or fictional character do you think would make a great financial advisor, and why?
Wendy Rhoades, the staff psychiatrist from the TV show Billions. I love that show. She’s a guru. She was amazing at helping the show’s CEO manage and navigate his emotions with his staff and his investments. The money business can be very emotional, and it’s up to the advisor to understand it, adapt to it, and help people with it.
This interview has been edited and condensed.