The main reason why people lack trust in an advisor is that they don’t know what to look for. They trustingly sign over their hard-earned dollars to an advisor they really don’t know too much about.
Choose the top three names from your research stage to make an appointment with. These next questions will be asked in person.

1. What is your biggest mistake in this line of work and what did you learn?

This will show you if they can be open and honest. Determine if it is sincere, relevant, and real.

2. How do you get paid?

There are a number of ways one can be paid in the industry, such as salary, commission or flat fee on sale, and percentage of assets. Also, ask, as an example, if you had $_________ to invest, how much would it cost me to invest?

3. What is one thing you would change about the industry?

There are things in almost every industry that could be improved. I personally have my opinions on the investment industry and it shows me where my values and passions lie.

4. Why did the last two clients leave?

Clients will inevitably leave; it happens. But what are the reasons? You want to know.

If you use these questions, believe me, the advisor will be super-impressed or scared. You want an advisor who is sincerely impressed: this one will look out for you. You do not want the one who is scared of you to know too much, though he or she may pretend to be impressed.

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If you are in need of an advisor, here are areas to research before committing to one.

1. Make a List of Ten Potential Names

You don’t marry the first person that comes along (usually recommended); you date, and you date often, to find the perfect one.

I fully recommend you search out ten advisor names and research these names. You can ask friends and family for a few names but do search the internet to get other names.

2. Enter Each Name (legal full name) and the Firm into the Database

If the person has been disciplined in the industry, then their name will come up with the details. This is not always a guarantee that their actions are pristine because the firm can compensate unhappy clients so the issue doesn’t go to the regulatory body since that looks bad on the company too.
The next stage is to take the top five names, phone each and ask these two questions:

1. What Licenses Do You Hold?

This is where you want to make sure they can help you with the right investment products. There are two main licenses: mutual funds license and fully licensed (can buy stocks, bonds, exchange-traded funds and mutual funds).

2. How Long Have You Been Working in the Industry?

I like ten years because they most likely have managed money during a market bubble and correction. This experience cannot be learned from a textbook. It’s invaluable.

Now you can move to the next stage of an in-person interview with the top names on your list. My next blog is about “Questions to Ask When Interviewing a Financial Advisor.”

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And How Much Do I Need to Start Investing?

When it comes to dating in North America, technology has led to creative apps in dating; making it easier to meet someone. But when it comes to finding someone to help us with investing there are limitations.

There are three main places where we can go to start our investment journey.

1. Bank Branches and Mutual Fund Companies

The first place to look when you have a small amount is banks and mutual fund companies. The benefits of mutual funds are that you get diversification with a SMALL amount of money and you can sign up for pre-authorized contributions to buy small amounts of the mutual fund each month. The huge disadvantage of mutual funds is they are the most expensive type of investment product in Canada. So once you have more money to invest I would suggest you seek someone who can sell more than just mutual funds.

Tip: make sure the advisor can sell you any mutual fund in the market and not just their company funds or proprietary funds.

2. Investment Brokerage Firms (Bank-owned or Independent)

The second area is investment or brokerage firms that employ people who are fully licensed to buy all types of investments, such as stocks, bonds, exchange-traded funds, mutual funds and insurance. This area is great because you can buy diversified exchange-traded funds which are less expensive than mutual funds and outperform over time.

Tip: make sure you understand what the advisor is buying because they can do more with the portfolio, given that they have more options.

3. On-line Investment Brokerage Firms (Bank-owned or Independent)

This third area is where you can DIY with an online brokerage firm. I have researched and compared fees because it matters when you have a small amount of money to invest. But if you have more money then it becomes much cheaper to trade with any of the online brokerage firms. Check out this link to see brokerage firm comparisons.

Tip: If you need help learning how to invest there are online courses or you can engage the services of a coach with an investment background.

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