Financial Friday #72: Can Your Financial Advisor Pass Our Test?


There are good reasons to seek out an expert when it comes to managing your investments. For most of us, it comes down to a lack of knowledge and/or a lack of time.

Whether you work with an investment firm or rely on the services of your local bank, that financial expert is taking care of your life savings. Despite the considerable consequences of their job performance on your financial future, a lot of us spent more time evaluating our mobile phone plan than we do our financial advisor.

If you haven’t given it much thought, why not run through the list below and make sure your financial future really is in good hands.


  1. Do you know your funds and their approximate rate of return?
    It sounds obvious but many people can’t answer this question. If you have to go searching for a statement only to find you don’t really understand what you are looking at, it might be time for a change.


  2. Do you feel the service used to be better, faster or more attentive?
    Your advisor may have too many clients, your investments may not pay them much, or they may be relying too much on your loyalty or friendly relationship to keep you as a client.


  3. Is it nothing but a sales pitch every time you talk?
    The best advice at any given time may not be, "buy more financial products". A good advisor should take into account the current situation with your family, job, aspirations and any other relevant issues before they start recommending more investments.


  4. Do you know how much you paid in fees last year?
    It’s very odd and actually quite difficult to buy something without knowing how much it costs. Your investments shouldn’t be any exception.


  5. Do they write things down?
    Forgetting a few details is excusable, but if it seems you are repeating yourself every time you see your advisor, they probably aren’t that interested.


  6. Do they contact you more than once a year?
    The annual RRSP deadline is like Christmas for many advisors and it’s normal to hear from them about that little nugget. However, they should be reaching out at other times of the year and not simply relying on quarterly statements to keep you in the loop.


  7. Are you happy with your returns?
    Saving time and getting professional advice are two areas where DIY investing breaks down, but you are also paying an advisor for exceptional performance. Regardless of what they claim, it’s hard to beat the market, even for an expert. Monitor your returns minus the fees and confirm the cost/benefit matches your expectations.


We have many clients who prefer the freedom and lower fees of a DIY investing approach, but we also have a lot of clients who use a professional advisor. Regardless of your investing knowledge or the size of your portfolio, if you’re not getting exceptional service from your advisor, it’s time for a change.


We don’t recommend any particular advisors, but we can definitely teach you how to choose one, or evaluate the advisor you have now. Join us next week on Tuesday for an immensely practical session, "8 Questions to Ask your Financial Advisor". The questions are simple enough for anyone to ask, and  everyone should be asking!.



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