Questions to Ask When Choosing an Investment Advisor
Eric Brown - Jan 22, 2021
Choosing the right Investment Advisor is a big decision that can significantly impact your financial future.
Choosing the right Investment Advisor is a big decision that can significantly impact your financial future. An Investment Advisor can help you with everything from providing financial insight and expertise to working with you to build a financial plan that is customized to your specific needs and goals. To help you with this decision, we’ve included a list of questions to consider below.
1. Are you registered? What accreditations do you hold?
Canaccord Genuity Wealth Management is a member of the Investment Regulatory Organization of Canada (IIROC) which oversees all investment dealers in Canada. IIROC sets and enforces rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees.
In additional to upholding professional standards as a fiduciary, many Investment Advisors maintain industry-recognized accreditations that reinforce their commitment to the highest levels of knowledge, integrity and service. It is worthwhile to understand what accreditations your Investment Advisor has, along with what they mean and the potential value they can add.
2. What is the depth of your industry experience?
You want to ensure you are working with someone who is qualified and has the right experience to provide you with the guidance you need. Consider questions like:
- What are your educational and professional qualifications?
- How long has your firm been in business?
- How long have you been with the firm?
- How long have you worked in the industry?
- What professional associations do you belong to?
3. How are you compensated?
Investment Advisors can be salaried or receive a commission or flat fee. If an Investment Advisor is salaried, the cost of their advice is built into the products you buy. It is important to understand how your Investment Advisor is compensated, the cost of their services and the depth of what you can expect to receive in paying that fee.
4. What kinds of products and services do you offer?
Not all Investment Advisors offer the same products and services or have the same expertise. It’s important to consider whether you simply want investment management or if you’re interested in more comprehensive financial planning Some specialize in certain kinds of investments. Others can offer you a wide range of investments and services. If you’re an experienced investor, you may want an Investment Advisor who offers a wide range of products and lets you choose. If you’re newer to investing, you may be more comfortable with fewer choices and more guidance from an Investment Advisor.
5. Who are your clients?
An Investment Advisor’s job is to help you work toward your financial goals. It will help if the Investment Advisor has a good track record with clients like you— people with similar backgrounds and goals. Ask your advisor to describe their typical client. Also ask for references from clients who have been working with the advisor for a while.
6. How will you help me reach my goals?
The Investment Advisor should ask about your financial goals and investment objectives. Are you mainly looking for safety, income or long-term growth? Are you saving for something specific, like retirement? They must also ask about your financial situation, investment knowledge and experience, and risk tolerance. This information may seem personal, but it helps ensure that the right recommendations are made for your specific situation. Should your financial situation change at any time, let your Investment Advisor know so they can update this information.
7. What level of service can I expect from you?
You should have a thorough understanding of the services your Investment Advisor offers. Consider questions like:
- How often will we meet to review my financial plan?
- How will you update me on the performance of my investments?
- How quickly will my phone calls and e-mails be returned? Will they be returned by you or by support staff?