If you are an individual with an investment portfolio in Canada, you have probably sat down with someone other than your current advisor to look at your portfolio. Most Investment/Financial Advisors, like myself, have met with many prospective clients over the years to provide a second opinion. When I meet with potential clients, I ask myself a few basic questions, such as "why does this person want a second opinion?" and "are they simply curious to see if their current advisor is doing a good job managing their money or do they think they can do better?".
Advisors often meet with an investor for an introductory interview to explain how they manage money and detail the services they provide. At the end of the meeting, most advisors offer to provide a second opinion on the investor's current portfolio. They offer to look at the rate of return, the current fees and dig deeper into the holdings of the portfolio. If a potential new client feels comfortable with the new advisor, and wishes to see more of what they have to offer, they often send the advisor their statements for analysis and review.
Almost all advisors will create a computer analysis of your current portfolio and a proposal detailing what they can do for you. At this time, you and your significant other may meet the advisor at their office or a restaurant where you are wined and dined. Most advisors will begin the process of taking apart your current portfolio and explain why he or she thinks you are doing terribly, and what stocks or other products you should own which are not there currently. They will then show you their portfolio and explain why it's better and why you should move your accounts to them. The question then becomes, why even conduct a second opinion if every portfolio advisor simply advocates for different products that may or may not get better returns?
How does my team provide proposals?
Our concept of a second opinion doesn't involve stock picking. There are many different combinations or products that one can have in a portfolio and not every product is appropriate for every investor and their risk profile. For us, a second opinion goes much deeper than mere stock picking.
First, we sit down with the client and find out who they are, where they are currently and where they want to be in five, ten or twenty years. Following this, we make a comprehensive plan detailing how we intend to get them there. I do not need your investment statements at this point, because it will not do me any good. My top priority is to figure out who you are and what you need. For example, I need to know what your taxation rate is and what your income needs are in order to prepare a proper asset allocation to mitigate risk. My next priority is to update your current will and estate plan, and to deal with succession planning. Following this, I may introduce you to our excellent internal team of professionals, which includes Chartered Accountants, lawyers, bankers and estate planners who can assist me in servicing you to the best of my abilities.
This is what constitutes a second opinion at RBC Dominion Securities. A multitude of professionals from a multitude of disciplines working together to prepare the best possible portfolio and financial plan for you, your family and your business. The best part is, it's already included in your fees.
If you would like to schedule a meeting I can be reached at 604-257-3225.
Sincerely, Kyle Sarai