Shafik Hirani worked a remarkable twenty years in financial services at his previous firm where, among his numerous accomplishments, he was selected as one of “Canada’s Top 50 Financial Advisors” two years in a row (2013 and 2014). Out of 5,000 advisors, Shafik was selected as the firm’s top advisor for each of the seven years between 2007 to 2013; during the same period, out of 500 Branch Managers, he was also chosen as the National Manager of the Year.
Shafik is no stranger to the winner’s podium. Throughout his career, he has been interviewed by the media on investor psychology and behavioural finance. He continues to be a regular commentator on BNN, CTV, and Global television networks and, articles about him have appeared in the Financial Post and Money Sense Magazine.
In 2013, the Financial Post first launched its TFSA challenge (Investment income, including capital gains and dividends, earned in a Tax Free Savings Account or TFSA, does not attract tax, even when the moneys are withdrawn). In the first challenge year, Shafik successfully turned his initial $25K investment into $177K.
He won again in the second challenge year when he grew his starting fund of
$177K into $277K.
And, this year’s win is the hat-trick – Shafik’s starting position of $277K became a whopping $500K, and made his TFSA one of the top-performing accounts in Canada.
Shafik laughed when I asked him about the strategy he used to realize such phenomenal gains. “I attribute my success to blind luck, nothing more. I was speculating, purposefully trying to blow things up and break away from convention. Instead of diversification, I chose concentration and made some lucky selections. And, in case you’re wondering, I would never recommend that my clients follow this uber risky investment strategy,” the three-time TFSA contest winner says.
In 2015 Hirani joined Aligned Capital Partners Inc. According to Shafik, “Aligned is one of the very few financial services companies that allows advisors like me to be independent. Banks want employees. Dealers, at least most of them, want you to either sell their branded products or only offer expensive mutual funds that have high management fees (known as MERs). I decided I wanted more choices. Aligned doesn’t make demands on the products I offer clients. I am free to create customized portfolios that include investments that suit specific client’s interests,needs, and appetite for risk,” the multi award-winner says.
Shafik’s parents are immigrants and came to Canada as refugees. He grew up on welfare and lived in subsidized housing. His parents, both accountants, believed in continuing education and passed their love of learning to their son, who excelled at his studies. Shafik skipped grade 5 and at the age of 16, graduated from high-school as the class valedictorian.
He went on to study Neuropsychology as a minor along with his Bachelor of Commerce Degree from the University of Calgary. Shafik completed the Investment Funds Course and the Branch Manager’s Course at The IFSE Institute and earned his Certified Financial Planner® (CFP®) Designation in 1998. He is also a Chartered Life Underwriter (CLU®). While building his Financial Advisory Practice he taught the CFP® Designation (Course #6) at Mount Royal University and served as Vice President of the Canadian Association of Financial Advisors (Advocis).
Philosophy and Approach:
Shafik believes the financial services industry confuses and paralyzes most investors. People recognize that they need information but don’t learn how to move past the research stage (analysis paralysis). This is further exacerbated by the quantity of disparate and often competing information out there. No wonder so many investors are loath to act.
“When I first began studying investor behaviour it occurred to me that there were flaws in how people traditionally thought about financial planning. I don’t believe that maxing out your RRSPs and TFSAs and paying down your mortgage is an appropriate strategy for every investor. Although the traditional approach might save you from losing all of your money, it will also stop you from getting rich. I didn’t follow any of the traditional approaches when I made my money,” Shafik says.
“I think the Egyptians had it right when they were building the pyramids. You
need to build wide and to have a strong foundation before you can build tall.
Unfortunately, most Canadians only focus on building tall. Different thinking is required to build wide."
"I teach my clients to stop thinking about themselves as individuals and to start thinking of themselves as corporations with Debt/Equity Ratios, Price Earnings Valuations, and the Weighted Average Cost of Capital. That is the only way I know how to make their money work for them, as opposed to them working for their money,” he adds.
What does psychology have to do with money? “Everything,” Shafik says. “Our subconscious mind influences our investment decisions. Cognitive dissonance causes most people to either do nothing, perhaps because doing nothing also ‘feels’ better than doing something wrong, or to seek instant gratification. They also tend to see their current selves as separate and disconnected from their future selves. We help our clients connect their current selves with their future selves which allows them to build wide as well as tall, which helps them make the best decisions with their portfolios.
Shafik continues, “Before blaming the capital markets or a specific macro-economic outlook for lacklustre performance, I encourage my clients to focus on how they make financial decisions. After all, like all other forms of will power,financial willpower comes from within. It saddens me that most people would rather waste time and energy on external distractions like hydro rates, Trump, currency, debts, and geo-political tensions. I tell my clients to leave those discussions to others. And then, I encourage them to thinking about how they make financial decisions.”
Shafik proudly declares that his practice never focuses on a specific target market. “Many advisors target the rich. I don’t. I couldn’t care less. My parents would kill me if I ever judged anyone by the size of their wallet. My goal is not to make rich people richer. Rather, my goal is to help the middle class improve their psychology around money so that they understand it and to teach them about the tools they need to build wide. Breaking conditioned patterns can be difficult, but I have conviction, passion and experience on my side and that usually wins the day,” he adds.
Shafik is happily married to Beth and they have a beautiful son Avery. The Hirani Foundation for Charitable Giving donates via a grant process to charities throughout Canada.
Suzen Fromstein is the author of Suits and Ladders, Ten Proven Ways to Keep Your Job Safe - with a few jokes thrown in. Suits and Ladders was an Amazon Best Selling Book in the Career Guides Category
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