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Dale Jackson

Your Personal Investor

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It’s funny how investors seem to complain about their advisors when markets are down. The truth is, advisors have no control over broader market trends. In most cases, good advisors can only make bigger gains when markets are up, lose less when markets are down, and ensure their clients understand what they are doing.

Here are some basic things you should – and should not –  expect from an advisor.  

 

WHAT TO EXPECT

Variety: A good advisor should have access to a diversified range of products to ensure your portfolio is diversified across asset classes, sectors and geographic regions.

Risk management: A strategy should be in place to not only grow your portfolio but preserve those gains over time.

Personalized strategy: It is imperative for an advisor to know personal details about a client, such as retirement goals and risk tolerance.

Ongoing advice: Advisors need to keep in touch when circumstances change on the markets or in a client’s personal life. Good advisors send regular newsletters. 

Tax efficiency: Putting more money in your portfolio by giving less to the government is a risk-free way for your savings to compound. The right use of registered retirement savings plans, tax free savings accounts or non-registered accounts can make a huge difference.

Current info/research: Good advisors have good research. No one knows it all.

Fee disclosure: New rules make advisor fees more transparent but your advisor is responsible for ensuring you understand what you are paying, and why.

WHAT NOT TO EXPECT

Guaranteed returns: Everything has a risk to some degree. It’s important to understand the possibility your investment could lose money.  

Exclusive information: If an advisor knew about sure-fire investments noone else was aware of, would she really be advising you for a living? Most of the information an advisor has is accessible to the public. Good advisors know where to find the best information and how to use it strategically.   

Mind reading: Since advisors are required to know their clients, it’s important for clients to open up about changes in their personal situations, their goals, and even their fears.

Time travel: In a good client-advisor relationship, decisions are made together. If you understood what you were getting into, you must accept the outcome. No advisor can go back in time to change that (not yet, at least).