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 Canaccord Genuity Corp.

What to Look for When Hiring Investment Advisors

Eric Brown - Feb 11, 2021
It’s imperative to your wealth management strategies to have an investment advisor who is qualified and who has stellar and exemplary investment experience accrued for clients.

Sometimes people think they have enough money and are satisfied with the financial planner they have. Other people think they may not have enough money, so they hesitate to make an appointment with an investment advisor. But the truth is, you don’t need to have a reason or a predetermined amount of money before finding a wealth management company or investment advisors.

In fact, you are better served by obtaining the assistance of a financial or investment advisor early in your wealth management planning to best optimize your investment returns. That’s why when you go to find investment advisors who best fit your needs, you want to know what type of financial planning they do. You also want to consider their experience in estate planning and money management.

Please keep reading if you want to learn more about paring down the choices until you find the investment advisor who best meets your financial requirements.

Investment Advisors

By definition, investment advisors choose, manage, and recommend the investments they think work best for you. They base this analysis not only on your wealth but on how best to optimize your financial strategies. Most of the time, somewhere after thirty years of age but before sixty-five years of age, we are committed to finding ways to make more money.

It’s common for us to want to grow our businesses, use part of our wealth in money-making investments, and plan our kid’s college funds or our estates. You want to do that with a reputable investment advisor. There are even times when we need more than one investment advisor to help us manage our money or achieve our financial objectives.

Choose an Investment Advisor

Since there are varying types of financial advisors, it’s easy to think you need more than one to fulfill all your financial objectives. However, it’s not always a wise financial action to take when you create a circle of investment advisors where each one is committed to one of your planning goals, with none talking to the other. That’s why sometimes it’s wisest to know ahead of time what to ask and look for when hiring investment advisors.

Hire an Investment Advisor

When you’re ready to choose an investment advisor, you want to have your questions, criteria, and wealth management objectives and documents ready to go. Investment advisors are regulated by the Investment Industry Regulatory Organization of Canada (IIROC). So, you always start by asking for the investment advisor’s qualifications.

It’s imperative to your wealth management strategies to have an investment advisor who is qualified and who has stellar and exemplary investment experience accrued for clients. There are various certifications that an investment advisor can have, but some of the ones you want to ensure they have, if at all possible, are Certified Financial Planner (CFP) and Chartered Investment Manager (CIM). There is a host of other criteria that may meet your personal wealth objectives but that can vary from person to person.

Best Investment Advisor

The best investment advisor for you will provide you with one of the two standards of care. Basically, money and investment management advisors are defined as being a dealing representative or an advising representative.

Dealing Representative

Literally, almost all investment financial advisors meet what’s sometimes known as a dealing representative. These advisors can have all the certifications, experience, and knowledge you know are required or want in your investment advisor. They ensure the investments they recommend are suitable to propose.

Advising Representative

An investment advisor who is also an advising representative is held to what’s known as the fiduciary standard. A fiduciary standard usually works in the area of portfolio management for high-net-worth and institutional clients. Investment-advising representatives work in your best financial interests when they provide recommendations or are just giving you advice.

These representatives have a fiduciary responsibility to meet their client's best interests and do so while meeting high standards equivalent to a moral obligation.

Help With Knowing Investment Advisor Fees

You also want to choose with some consideration given to the investment advisor’s fee structure. You want to know the investment advisor's fees and understand their fee structures. There are three common ways investment advisors get paid, and they include, but aren't limited to, commission-based accounts, mutual funds, and fee-based accounts.

Sometimes if there's a particular project, there can even be an hourly or fixed fee rate. Many clients prefer commission-based accounts because when they make money on their wealth management, so does their advisor. Most of the time, the commission is a percentage of the investment they are buying or selling for you.

The mutual funds have the fee you pay your advisor come out of the mutual fund internally. That means the internal fee comes out of your management expense ratio (MER) based on your return, which is usually between 1.5% and about 3.5%. The fee-based account is usually charged to you at a fixed percentage rate, depending on your portfolio's value.

Your Next Step When You Hire an Investment Advisor

Now that you know what to look for when you hire an investment advisor, your next step is one of the most important ones you'll take in building up your wealth portfolio. Reach out to Graham Wealth Partners if you're ready to seek a team of experienced financial investment advisors who will help you strategize on how best to meet your financial growth objectives. It doesn't matter if you've already got a few of your funds managed.

What does matter is that you are ready to see if your financial objectives are being met and what else you can do to help optimize your money management. Everyone wants the best return on their investments. It takes a keen, astute financial knowledge to know what you need and where you should go to meet your financial expectations. Graham Wealth Partners is the best place to start.