The Advisor "Checklist"

In his column from November 18, John Heinzl wrote:

http://www.theglobeandmail.com/globe-investor/investment-ideas/features/investor-clinic/do-your-homework-to-find-adviser-best-for-you/article1367571/

Here's a checklist if you're shopping for a financial adviser, or if you want to evaluate the service you're getting from your current one. My comments in bold.

1. Fees are transparent
Low fees are one of the most important ingredients in a successful investing plan, but many investors have no idea how much they're paying or how their adviser is compensated.
Good advisers make the information available in plain English and are happy to answer questions. "It needs to be straightforward and in writing," Mr. Heath says.

We are fee based for most clients. Depending on complexity and size of investible assets, between .75 and 1.25%. That includes cash-flow and risk analysis, strategic asset allocation and tax efficient, comprehensive wealth management plan.

Portfolio management will cost an additional .60 to 1.0% depending on the manager, portfolio size and strategy complexity.

Also included is on-going monitoring and regular updates according to the client’s wishes.


2. They were recommended
Getting invited to a free dinner at a ritzy club may make you feel special, but it's no way to hire an adviser. The best advisers are those that come highly recommended by someone whose opinion you trust.
But don't stop there: Ask the adviser for a couple of other references, and be sure to call them. You'd do this when hiring a contractor, so do just as much research - if not more - when selecting someone to manage your money.

www.jstomenson.ca
http://www.wellingtonwest.com/advisors/jstomenson/WhatOurClientsSay.aspx

3. They pass the "like" test
Money can be a touchy topic, so if you want to have a productive relationship with your adviser, you'll have to feel comfortable opening up to him or her. But you won't do that if you don't hit it off on a personal level.
"You need to have someone you can confide in and somebody you can trust and tell them the whole story. If you can't tell them everything, you're not going to get the best possible advice," says Jim Ruta, author of Master Your Money Management: How to Manage the Advisors Who Work for You.

Too busy to come and see us? We’ll come to you if you want…we’ll even bring lunch!!

4. They use plain language
"The financial business is so overrun with jargon and complicated language that some folks say yes to things they don't understand," says Mr. Ruta, a Burlington, Ont.,-based consultant to the financial industry. "Unless you can understand your adviser they can't help you."

There is no such thing as a stupid question.
Read Stuart Lucas’ Wealth, we think it is accessible and very client oriented.

5. They have a process
The best advisers explain, in writing, the process they will follow to meet your financial goals. The "client connection letter," as Mr. Ruta calls it, might include a description of the investment products to be used (stocks, bonds, mutual funds or exchange-traded funds), how the adviser is compensated (commissions or asset-based fees) and the frequency of adviser-client meetings.

http://www.wellingtonwest.com/advisors/jstomenson/ourProcess.aspx


6. They favour lower risk
Instead of trading frequently and trying to make a big score on a speculative stocks, good advisers follow a boring approach.
"While they may hold stocks, they are usually just the big-name financials, utilities, resource companies, and they don't trade them," says Garth Rustand, founder of the Vancouver-based Investors-Aid Co-operative of Canada.
Good advisers also don't claim to have any special ability to predict what the market will do. Rather, they recommend indexing - buying and holding low-cost ETFs or mutual funds that track broad market indexes.

Lower risk, well balanced across multiple asset classes, lowers volatility. Volatility is in the long-term (20to 30 years) very harmful to a portfolio.
Read : The Informed Investor: Five key concepts for financial success under “our process” on our website.


7. They aren't into bling
The best investment advisers often drive sensible cars and live in modest houses. "Their small offices won't be cluttered with sales trophies," says Mr. Rustand, a former broker.
They are "personally frugal and try to keep their client costs at 1 per cent or below, knowing that the lower their costs, the better the client's return," he says.
Remember that every dollar that goes into your adviser's pocket is one that doesn't stay in yours.

I drive a Jeep Wrangler (4 door).

More info ? Call me, or email me: jstomenson@wellwest.ca
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