Pick three candidates and ask them these questions
Kevin Greenard and Keith Greenard
Province
Wall Street, like other financial markets, can be a jungle. Make sure you have good advice. Photograph by : The Associated Press
VICTORIA — Choosing a financial institution and adviser has become an increasingly difficult decision for many individuals to make.
Finding the right adviser was not always this complicated. Before the deregulation of the financial-services industry in the early ’80s, there were four distinct business units: banking, trusts, insurance, and investment dealers.
Today, each of these business units may offer multiple services overlapping into the other pillars — the clear distinction is gone.
Adding to the complexity is the sheer growth in the number of investment dealers and advisers.
Spending the time to find the right financial adviser based on your needs may be one of the most important investment decisions you will make.
We recommend that individuals looking for a financial adviser visit at least three different financial institutions.
The more time you spend at this stage, the more likely you will find an adviser who is most suitable for you. When you meet with each adviser, we suggest that you are prepared with a list of questions. By obtaining answers to these questions from at least three advisers, you can make a better comparison.
The following are suggested questions that you may want to ask a financial adviser before entering into a relationship:
Experience/education
– What is your educational background?
– What professional designations do you have?
– How long have you been in the financial-services industry?
– When do you plan to retire?
– Are you licensed as a securities dealer?
– Are you licensed as a mutual-fund dealer?
– Are you licensed to sell insurance products?
Service overview
– How many clients do you have?
– Do you have a minimum account size?
– How often do you contact your clients?
– Do you have support staff?
– What are the types of services you provide?
– What makes your service offering unique?
– Do you work with other professionals, such as lawyers and accountants?
Investment process
– What is your investment selection process?
– Do you sell proprietary products?
– What type of products do you primarily sell (individual equities, mutual funds, bonds)?
– Are there any restrictions on the types of investments you may offer?
– How liquid are the investments you are recommending?
– How do you monitor the investments?
Compensation
– How is the firm compensated?
– What are the fees to sell and buy the investments you recommend?
– What portion of the fee paid to the firm is paid to you as the
adviser?
– Do you offer fee-based options?
– Do you offer managed accounts?
– Do you offer commission-only accounts?
References
– Do you have clients willing to speak with me about your services?
– Do you have professionals who may be willing to speak with me about your services?
– Have you ever had a complaint filed against you with a securities commission, IDA or any other professional or regulatory body?
– Have you ever been disciplined by a professional or regulatory body?
We recommend that you call any references provided and that you visit the B.C. Securities Commission website at www.bcsc.bc.ca.
For a nominal fee you can conduct a background check through the website and search for any
disciplinary action since 1987.
The decision to select the right financial adviser is an important one. Doing your due diligence could prevent an unfavourable outcome.
Kevin and Keith Greenard are members of the Greenard Group at ScotiaMcLeod Victoria.
© The Vancouver Province 2006