Finding a financial advisor isn’t an easy task, seeing as not every advisor is right for every client. Depending on what your specific financial goals are, you’ll need to select an advisor based on what you hope to achieve as well as your own unique investment style.
As well, it’s worth noting that every financial advisor is an individual as well, and you shouldn’t be too quick to settle on the first one you come across. Choosing a financial advisor should be approached with the same mindset you would have if you were hiring an executive for a business venture – you’d have to interview them meticulously before settling on a decision. But what questions are the right questions to ask a financial advisor? While this might depend largely on what you’re looking to achieve, there are some base-level questions that should be considered when choosing a financial advisor. Here are some of the important questions when considering a financial advisor. Are you a fiduciary? A fiduciary always works in the best interest of the client, meaning everything they recommend is catered specifically to you. Non-fiduciaries only have to recommend “suitable” products for you – even if that means they aren’t the lowest-cost or even the most ideal for you. What are your qualifications? Financial advisors and professionals can have a laundry list of initials behind their names. Whether or not a finance professional is an investment advisor who has a multitude of destinations, it’s up to you to properly vet them. If you need specialized advice, look for an advisor who has expertise in that area. Take the time to meet with several advisors, ask friends and family if they know one they’d recommend, and make your decision based on the one you’re confident has the experience and credentials to help you reach your goals. What asset allocation do you use? You know it’s important to be diversified, right? Your asset allocation is how you create a completely diverse portfolio, which can drive most of your returns. Ideally, your portfolio should include domestic and international stocks, as well as small, mid and large-cap companies. What products do you offer? You should ask about the product range, what products that aren’t offered. If there are any limitations or penalties on selling or redeeming investment products. Do they offer access to lower-cost products such as index EFTs? And what the typical percentage of client portfolios in their company’s product. What is my total cost to work with you and how are you compensated? Even if you’re working with a fiduciary financial advisor, you may not understand the all-in-costs related to their services. Here are some examples of common fees you may pay when working with a financial advisor: Advice Fees: This can be in the form of hourly fees, one-time project fees, or a per centage of your investments. Transaction Fees: These are charged by the custodian when your advisor buys or sells investments on your behalf. Expense Ratio: This particular fee is charged by a mutual fund or exchange-traded fund (AKA EFT) to cover operational expenses. These are just some of the top questions you should consider when looking for a financial advisor. Financial advisors provide a multitude of valuable services and can help you meet your financial goals – which is precisely why you need to make sure you find the right fit. CANACCORD GENUITY WEALTH MANAGEMENT IS A DIVISION OF CANACCORD GENUITY CORP., MEMBER-CANADIAN INVESTOR PROTECTION FUND AND THE INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA The comments and opinions expressed in this article are solely the work of Clinton Orr, not an official publication of Canaccord Genuity Corp., and may differ from the opinion of Canaccord Genuity Corp’s. Research Department. Accordingly, they should not be considered as representative of Canaccord Genuity Corp’s. beliefs, opinions or recommendations. All information is given as of the date appearing in this article, is for general information only, does not constitute legal or tax advice, and the author Clinton Orr does not assume any obligation to update it or to advise on further developments related. All information included herein has been compiled from sources believed to be reliable, but its accuracy and completeness is not guaranteed, nor in providing it do the author or Canaccord Genuity Corp. assume any liability. Tax & Estate advice offered through Canaccord Genuity Wealth & Estate Planning Services Ltd |
AuthorClinton Orr is a Senior Wealth Advisor and Senior Portfolio Manager with Canaccord Genuity Corp. Archives
July 2023
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