Choosing a financial advisor is one of the most important financial decisions you will ever make. Before entering into any partnership, ask the following questions, and make sure you are comfortable with the answers.
1. How are you accredited or registered?
Ask your prospective financial advisor how they are registered, and the range of services, products and advice they are qualified to provide. The investment firm they are employed by should be a member of the Investment Industry Regulatory Organization of Canada (IIROC), which regulates all investment dealers in Canada. IIROC monitors and enforces rules regarding the proficiency, business and financial conduct of these firms and their advisors. Visit www.iiroc.ca to learn more.
2. How are you compensated?
Many advisors are paid by commission for the products they recommend, while others receive a salary or a flat fee. Find out how your advisor is compensated, how much the services will cost, what choices you have to pay them and what you can expect to receive in return.
3. What is your experience?
Your advisor should be forthcoming about their industry experience, professional qualifications, memberships and education. Also, fewer years as an advisor may not necessarily mean less expertise, for example, I consider myself a relationship expert with 11 years of engaging, trusting and loyal relationships. A gateway to Canada's leading Wealth Management firm, my team offers a combined 97 years of experience providing you with expert advice, when you need it.
4. What kinds of products and services can you provide?
Ask if your advisor is limited to certain investments: proprietary products offered by their firm, GICs or mutual funds, or if you can draw on a greater range of investment products. Make sure you ask about your advisor’s access to investment research, portfolio strategy teams, and risk management groups. Find out if your advisor focuses on investment solutions only, or can also provide additional services that may help you achieve your financial goals, such as financial, tax, retirement, and estate planning services.
5. What clients do you serve?
Ask whether your potential advisor specializes in any particular client group, such as business owners, medical professionals or retirees. Don’t be shy about asking for references either; your advisor is in many ways applying for the job.
My clients often have unique and intricate financial situations which require sophisticated guidance and opportunity spotting. They include:
•Busy professionals, executives, business owners & entrepreneurs
•Young professionals & entrepreneurs taking their career to the next level
•Women looking for an engaging & holistic experience with their financial advisor
•Retirees seeking a conservative investment savings & income strategy
•Well-established families with complex intergenerational financial situations
6. How will you help me reach my goals?
Your advisor should ask you to outline what you hope to gain – for example, preserving income, building wealth, retiring comfortably – and can guide you if your expectations are unrealistic. Your advisor may also draw on value-added services such as financial, tax or estates planning to ensure that your ongoing wealth needs (in addition to investments) are in sync with the rest of your affairs. Expectations of these sorts may be found in a value proposition or investment philosophy.
Also, it's imperative to have a written Investment Policy Statement and written Financial Plan with your investment advisor. These documents require a thorough understanding of your wealth and your investor profile (tolerance for risk) so that your plan reflects your unique objectives and more importantly, gives you the confidence to act in your own long-term best interests, knowing you have a plan in place.
Ask about your advisor’s investment process, and how they create and manage your portfolio. Is each portfolio custom-crafted, or is the advisor following a set of established models? Confirm that you are comfortable with this process.
7. What kind of service will I receive?
Your advisor should clarify at the outset the level of service you can expect. This includes how often you will meet to review your progress; how your advisor will update you on portfolio performance; and what sort of contact & communication you can expect from your advisor or support staff.
You can get an idea of how our long term relationship begins here.
As you search for the right financial advisor, please don’t hesitate to ask any questions that help you feel more confident in the management of your wealth. The below questionnaire may help you with your interview process.
For more information, please visit www.iiroc.ca or contact me directly.