How to find a financial adviser/planner
At the end of my Investing For Retirees seminars, I am always asked, “How can I find a financial adviser/planner that I can trust ?” Recently, listening to an interview with Rob Carrick, personal finance writer for the Globe and Mail (and one of the very best in the business), he mentioned a list of Fee Based Financial Advisors which is maintained by the website ValueofSimple.ca. This is not a recommended list, but it is a good starting point for anyone wanting to find a financial adviser that you can be assured will be working in your best interests, and who will not be beholden to any company or compensation scheme – other than the fee that you might be paying. You can find the website and the list here:
The value of the holistic approach
Fee based financial advisers take a holistic approach to developing a financial plan. In contrast, I am surprised by how many Investment Advisers take a very limited approach and do little or no financial planning. Far more than just investments, they can look at estate issues, tax situations, current and future income needs, and even insurance. For those who are not ready for Do It Yourself investing, and for whom a Robo Adviser doesn’t meet their needs, a Fee Based Adviser may be well worth the investment. For retirees who are in the decumulation phase (ie spending phase) of investing, which is far more complex than the accumulation phase because of the need to generate income and minimize taxes, a Fee Based adviser may be the answer.
Expectations for a Fee based Adviser/Planner
What can you expect a Fee Based Adviser/Planner to do ? For starters, you can expect them to take an unprejudiced approach to providing advice. That means that they will not be influenced (as some financial advisers are) by the amount of money that they will make from the companies that they recommend. Investment advisers/advisors who are commission based can be biased because of the need to make an income or meet corporate targets. And please note that an Advisor with an “o” is not a registered Adviser with an “e”, at least in Canada, believe it or not. An Advisor is basically a licensed salesperson. Beware. Check his or her business card.
The Professional Backup you need for DIY investing
You should also demand that Fee Based Advisers/Planners take a holistic, that is a total, approach to your personal situation. They will look at your tax situation, your pension income, your health, your dependents’ health, your lifestyle, and your retirement dreams. You can expect a full review of both your assets as well as your projected expenses, for the rest of your life.
Many Fee Based planners do not do investing management themselves, but may refer you to another person. Or, perhaps a better option, you can take their plan and DIY with an Online Discount brokerage account. With a professional to guide you, that makes DIY investing a serious option for many. And that means that you can begin to save big bucks on management fees. For example, if you exchange costly managed mutual funds for All In One ETFs, you can accomplish much the same gross returns while paying one tenth the Management Fees, .22% versus 2.2%. Please see my repost Which Vanguard All In One ETF should you invest in ? here:
As always, readers are reminded to conduct their own due diligence and/or seek the advice of a registered financial adviser/planner.