When you think of the most important relationship in your life, the relationship with our financial advisor may not be our top priority. According to money guru Melissa Leong, it really should be!
So if you’re wondering, “How do I seek out the right financial adviser?” or “Who is the right one for me?”, here are some tips from Melissa that will help you find “the one”!
Play the field
Ask your inner circle to refer you to someone and interview at least three people before committing to anyone. Do your research! To find out more about them, you can Google them, read reviews online and make sure their credentials are legit. This can be completed by searching their name online through the Financial Planning Standards Council in Canada.
How to tell they’re ‘the one’
A good financial advisor should be able to align you with your future financial goals. In doing so, they should be able to help you set and work toward your goals, keep you accountable and check up with you regularly.
A good planner will check in with you regularly or meet at least once a year to discuss your progress and any new plan, and will be upfront about their fees and limitations. If someone sounds too good to be true, be suspicious.
What about the fees?
Your advisor gets paid. Maybe your bank advisor gets a salary. Maybe they’re fee-based, meaning they charge you a percentage of all of the money you have invested with them. Maybe they’re a fee-only advisor and you pay a flat fee of, say, $2,000 for a comprehensive financial plan).
You don’t see a bill. But oh, you’re paying. Find out what your advisor is getting out of this relationship.
If you hit a bump in the road and are unhappy in your relationship with your advisor, start by discussing your concerns with your money coach. A good way to do this is to put it in writing. Send your money coach an email regarding your concerns and questions. If you get back a load of jargon or you feel confused, belittled or defeated, speak to the financial advisor’s superior at the firm.
If that doesn’t settle your complaint, contact a regulatory agency or ombudsman. They often investigate complaints and dole out disciplinary action, including fines and suspensions.
Don’t be afraid to end your relationship
If you feel like your relationship with your advisor has run its course, it is okay to end it! A solution can be sending them a ‘Dear John’ letter, thanking them for their service and informing them that you’re going in another direction.
You do not have to sell your investments when you fire your advisor. If the advisor has used widely available funds, you can move them “in kind” to an advisor at another investment firm or bank. However, some fund companies sell their own products and an advisor at a different company may not have access to them.
If you like the products but not your advisor, opt to stay at the firm, keep your existing investments and ask a supervisor or manager to switch you to another advisor within the company. If you want to leave the fund company, make sure you contact the firm to ask what fees you may pay if you sell your funds.
How to keep the fire burning
If you’re happily involved with a financial advisor, what can you do to keep the fire burning and get the most out of it long term? Like anything, you’re going to get what you put in. Make time for your advisor. Make sure you’re meeting annually to talk about your newest goals and your changing plans.
Ask key questions: ‘Am I on track with my retirement savings? Is my portfolio properly set up and diversified to meet my goals? What can I do to be more financially successful?’ And if you don’t understand something, don’t pretend that you understand. Your advisor is there for you. You pay him or her to help you understand. She’s sitting in passenger seat, but you’re the driver.