How do I know if my Financial Advisor is the Right Fit?
Choosing the right financial advisor can be tough. How do you know if it’s the right person (or company) to manage your life savings? It’s an important job and it pays to shop around for the best option for you and your family. Here are 3 important factors to consider when searching for a new advisor to manage your investments.
One of the most talked-about aspects of financial advice is fees. There are countless ways that the investment advisory industry earns their keep - commission, advisor fees, loyalty charges, trailers, etc. To make matters worse, each individual investment may carry fees (often called Management Expense Ratios or “MERs”). Transaction costs for each trade are common, and there are additional fees for withdrawals and other services. The important thing to remember is that your investment advisor deserves to earn a living as long as their duty of care and professional advice are worth it to you as the investor client. Have an honest conversation with your current advisor about fees and minimizing costs - if you don’t get a clear answer, it may be time to shop around.
Different types of financial advice come with different status under the law. The gold standard is a “fiduciary duty” where an advisor is legally bound to work in the best interest of their clients and their money. Loyalty and care are the goals for these advisors. Bank employees and broker-dealers often do not have a fiduciary duty to their clients, and their allegiances can be split between their clients and their employer. Fiduciary duty isn’t free - you often pay more for the extra legal protection against conflicts-of-interest and unfavourable commission structure.
Choosing the right advisor is important, but it’s best to start with a simple exercise for yourself. Ask yourself what you need and what your goals are. Are you just investing in the stock market to earn a little extra income? Are you using insurance as part of your retirement plan? Do you have $10,000 or $10 million in your portfolio? Are you self-employed? Do you need expert tax advice? The more complex your situation, the better advice you’ll need from your advisor.
We specialize in helping individuals and families clarify their goals and craft a flexible plan that we’ll monitor and adjust along the way. When your life changes, we will be there to help keep your plans on track.
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