It’s your life filled with your passions. It's your future and the future of those you love and care for. As advisors, what your financial goals are and what your money means to you is important to us. We strive to help you achieve your happiness.
There are many different firms and advisors all seeking you as a client. You need help, but who do you choose? Our industry varies considerably in advisor credentials, experience, compensation and fees. All this needs to be considered. In the end, you have to choose someone you trust and that connects with you.
As an advisor, I’ll often receive requests to look at investment portfolios from other firms and offer a second opinion. In a recent example, the portfolio looked great at first glance—promises of high returns and a track record of solid performance. After bringing in a team to dig deeper, we discovered that the client wasn’t being told the whole story.
To start, the portfolio was too aggressive for this individual. The performance, although good, had a very high risk of volatility for the return that it was providing, and the fees the client couldn’t see meant that the total fees were more than triple what ATB clients would pay. In simple terms, the advisor received higher commissions on certain high risk/return investments that created unnecessary risk for the client. The offer was in the advisor's best interest, not the client’s.
So how do you avoid these types of experiences? Take your time to be comfortable with the decision as it could be one of the most important life decisions you will make. To assist, I’ll propose eight things to look for in a great advisor:
1. Their definition of success
An advisor whose actions illustrate that they define success as a long-term relationship with you and your family rather than commissions from quick transactions. A good test of this is their willingness to be accountable if something goes wrong.
2. Their time for you
An advisor that allocates their time and builds a strong team around them to allow for meaningful ongoing contact with you, your family and even your accountant. They listen to your concerns and fears. They have the energy to find a way to get things done for you.
3. They’re transparent
An advisor that implements your plan using investment products with transparent costs, risks and payoffs. Ask how fees are charged. Upfront? Back-end loaded? Annually? They won’t fear you asking for a second opinion if they know their approach is sound.
4. They have integrity
An advisor that talks openly about how they are compensated and why they feel the fees are a good long-term value for clients. An advisor that lives their professional and personal life with integrity.
5. They know their stuff
An advisor with a solid technical background from post-secondary study, continuing education and specialist designations in fields such as financial planning.
6. They accept that they may not know
An advisor that’s sufficiently confident and humble to accept that no one can be all things to all investors at all stages in life. They bring in a trust and estate expert or an investment counsellor specializing in topics relevant to wealthy Albertans.
7. They speak your language
An advisor that has the emotional intelligence and adaptability to communicate with you and your family in a way that’s understandable and enjoyable. They might not be your best friend, but they earn your trust when appropriate.
8. They aim high
An advisor that makes your client experience unique. They look for opportunities to wow you and make you want to share how great your client experience is.