When it comes to your money, it’s wise to be cautious and to ask questions
By Katrina Caruso
An overwhelming 97% of Canadians working with a financial advisor say they trust that advisor, according to recently released survey results. That sounds great—only 3% of those who reported having an advisor said they weren’t satisfied with him or her. A 2016 survey, also commissioned by Hennick Wealth Management, produced similar results.
Do the results mean that Canadian investors are too trusting? Perhaps not. Only 37% of those polled said they had a financial advisor. However, that might not be due to a lack of trust: when they were asked, “Who do you feel is most capable of helping you invest or manage your money most effectively?”, 43% of respondents said they were. Men were especially confident—47% said they were the most capable of managing their money, whereas only 38% of women felt the same about themselves.
One figure that rose from the previous poll was how many investors with an advisor had asked what sort of investments that advisor made with his or her own money: 33% had enquired, up from 26% in 2016. Almost half—48%—said they were too shy to ask, though that number is down from the 57% reported in the 2016 poll.
When it comes to your money, it’s recommended that you find an advisor you’re comfortable with, somone you can ask serious questions. Here are some questions for your prospective (or current) advisor to get you started:
Who he or she is: What led you to financial advising? Are you a part of any professional associations? Do you have any licences or other credentials?
What he or she does: What services do you provide? How does that work? In what areas can you (or can you not) advise me?
How he or she makes money: How are you paid? What are your fees, and what is included? Do you receive or pay any commissions or referral fees?
Responsibilities: Are you a fiduciary? (A fiduciary is someone who is bound to put the client’s best interests ahead of his or hers.) How will you work to put forward my best interests?
Previous/other clients: Who is your typical client? Do you have experience working with clients who fit my profile? Do you have any client testimonials available?
Work style: What is your investment approach or philosophy? Why? What are your specialties? Why should I choose you as my advisor?
Level of involvement: How many other clients do you have? Will I only be working with you or with a team of other advisors? Will we meet in person, over the phone, or via e-mail? How frequently do you meet with/contact your clients? How accessible are you to your clients?