Aug 12, 2016
Pattie Lovett-Reid: Is the financial advisor bar set too low?
A new report by Hennick Wealth Management found that 44 per cent of respondents felt that the best person to manage their money was themselves. Yet, those who work with a professional reported extremely high levels of satisfaction with services from their financial advisors.
Asked to score their advisors on various areas of their services, only one in five reported dissatisfaction. Hennick Wealth said it believes this high level of satisfaction may have more to do with investors’ complacency than competency.
Here are a few key findings from the report:
1. Financial professionals got high marks on trust – politicians not so much. Sixty-one per cent of respondents said they trust their financial planner can make sound financial decisions, while 40 per cent said they trust their spouses and only three per cent of those surveyed said they trust politicians.
2. Men were more likely to trust themselves to manage their own money (55 per cent), versus only 33 per cent of women.
3. Canadians who work with an advisor are extremely satisfied – maybe too much. Only one per cent of respondents said they didn’t trust that their advisors would act in their best interest. In another question, one per cent of respondents disagreed with the statement that their advisor understands investments better than themselves; and finally, only one per cent said they didn’t think their advisor provided them with valuable financial advice.
Canadian investors seem pretty happy with how their finances are being managed and Hennick wants to make sure the enthusiasm is warranted. There’s little doubt there are great advisors out there and you could be very happy, but that doesn’t mean you should abdicate sole responsibility to your advisor.
Barry Schwartz, chief investment officer at Baskin Wealth Management, said on BNN that your relationship with your advisor should be something you work out right at the beginning.
“As a portfolio manager I have to make sure that I accept clients who trust my strategy and my style and the way we communicate. And as client you have to see if that portfolio manager fits what you're looking for,” Schwartz said.
“We don't do a lot of trading, so if a client comes down to me and says, 'Why aren't you doing this, why aren't you doing that,' we're not a good fit. So 'fit' is the most important thing."
Ask the tough questions, understand the fees and always check in to ensure your portfolio is aligned to who you are as an investor. At the end of the day, no one is going to care more about your financial future than you.
As the Chief Financial Commentator for CTV News, Pattie Lovett-Reid gives viewers an informed opinion of the Canadian financial climate. Follow her on Twitter @PattieCTV
