How to Hire the Right Wealth Manager for You

Newsflash! Almost anyone in Canada can market herself as a “financial advisor”. This puts the onus on you, the investor, to ask the right questions before engaging an advisor.

Question to ask your prospective advisor:

  • Who are your typical clients?
  • Can you provide me with references and the opportunity to speak with a few of your clients?
  • What’s your education and professional experience?
  • How long has your firm been in business?
  • How long have you been with the firm?
  • Are you and your firm registered with the securities regulators (see below)?
  • What products and services do you offer?  Which do you not provide?
  • How will you help me reach my goals?
  • What investment biases do you and your firm hold?
  • How often will we meet in-person and how will I hear from you throughout the year?
  • Will you personally work with me or will I deal with someone else at your firm?
  • What kind of account reporting will I receive?
  • How do you get paid—specifically?
  • Will you put your recommendations in writing along with fees, commissions, charges, referral fees and more?

Want to find a registered advisor in your area?

Contact your local securities regulator, (Ontario Securities Commission, Alberta Securities Commission, etc.). The Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) can give you a list of registered member firms. You can also contact the Portfolio Management Association of Canada (PMAC), the Financial Planners Standards Council (FPSC), or the Institut quebecois de planification financiere (IQPF) for additional information.

Once you’ve identified a few possible advisors, follow these 3 simple steps:

  1. Check registration (Canadian Securities Association National Registration Search and Local Regulator.)
  2. Check disciplinary history (CSA Disciplined Persons’ List; CSA Cease Trade Orders Database and Local Regulator)
  3. Do an internet search for the latest news.

Question to ask yourself (and your advisor) before making an investment:

  • Do I understand the investment and how it works?
  • What are the risks?
  • What are my goals?  For example: Am I seeking safety, growth, income, or a combination?
  • Does this investment match my goals?
  • Is the potential return realistic based on the investment type and the amount of risk?
  • When will I receive payment and in what form?
  • For how long will I be invested?  What if I need the money sooner?
  • What are the costs to buy, hold, and sell my investments?
  • Do I understand the tax implications of the purchase, holding period, or eventual sale?

The bottom line

  • Am I comfortable with this person?
  • Is she willing and able to explain investing in a way that I understand?
  • Is he giving me time to think about my decision?
  • Am I encouraged to shop around, get a second opinion, or consult my lawyer or accountant?
  • Am I realistic about the potential gains, losses, and risks of this offer?
  • How basic or complex are my financial needs, e.g. tax or estate planning?
  • How much investment knowledge do I really have?
  • Would my assets be best managed at the bank, broker, or portfolio manager level?

Investing like a boss

Many people feel intimidated asking direct questions of a potential advisor. However, it’s important to keep in mind that it is your money. You are the CEO of your own money. And, like any good executive, it’s up to you to hire the best person for the job.

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