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 The
Money Management Newsletter: Managing
Money
Choosing a good financial adviser is the most
important investment you'll ever make
By David J. Newman
Director, Financial Information Services
Many people spend more time planning for a vacation
or buying a sofa than they do planning for their financial future. When
they finally decide it's time to put their financial house in order, they
don't know where to start.
Start by getting some professional help. You shouldn't hesitate seeking
professional financial advice any more than you would avoid seeing a doctor
when you're sick. A professional financial
adviser can help you set up a financial plan. He or she can help you
determine which investments are best suited to achieve your financial
goals, establish a savings program to build your assets,
and explain the potential risks and rewards of different investments.
Probably the most important contribution an independent financial adviser
can make is to help you stick to your plan. Research conducted by Dalbar
Financial Services found that during an 11- year period ending June 1995,
U.S. investors with a financial adviser held their funds longer and earned
almost 17 per cent more in total cumulative return on their investments
than those who purchased their funds directly.
Finding a financial adviser is no different form finding a doctor. People
are usually willing to give a good reference. Ask you friends and relatives
for recommendations. Ask about the adviser's experience, track record,
services, investment approach and fees. And don't be afraid to request
credential. Remember, it's your money and your future. If the person you're
considering makes you feel like you're wasting his or her time, chances
are, you'll be wasting your money.
Interview any financial adviser you're interested in to be sure he or
she fits your style and risk tolerance.
The candidate must understand your investment needs. He or she must be
someone you trust, and someone who can tailor a portfolio to meet your
personal requirements. A conscientious planner will use the initial meeting
to discuss your financial situation, objectives and risk tolerance level.
Consider asking your prospective financial adviser the
following questions:
- What are your qualifications?
- Do you understand my attitude towards risk?
- May I see a sample of a completed financial plan?
- What services will you provide and how often?
- What fees or commissions do you charge?
- Can you provide references?
If you've decided to invest in mutual funds, be sure
to ask these additional questions:
- How much will it cost to buy into the fund after
commissions and fees?
- Will I receive an annual review of the fund and the
fund manager's strategy?
- How often will Receive detailed information about
the fund?
- Will my investments be compared periodically with
competing funds?
- Will you check with me on a regular basis to find
out if my investment needs have changed?
If you're ready to get your finances in order, start
by investing in professional financial help. Ultimately, choosing a financial
adviser is the most important investment you'll make.
Fiscal
Agents - Advisors
How often do we say this to ourselves? The time pressures
we are under are enormous, and we simply don't have the time to "do
it all." Yet when it comes to money matters, even if you have the
time, do you really have the expertise to sift through information on
mutual funds, GIC options, retirement plans, RRIFs, LIFs and all the other
investment "ifs?" Would you have confidence in your decision?
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©
, Fiscal Agents Money Management Newsletter
25 Lakeshore Road, Oakville, On L6K 1C6.
(905) 844-7700
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