Do I need investment advice?

March 4, 2016

Not everyone needs full-time investment advice from a pro. But what about those times when an having an expert opinion weigh in might help?  What should you expect?

Do I need investment advice?

Not everyone needs an investment adviser. But make no mistake – if you’re making your own investing decisions, you’re going to have to do some serious homework.

Researching companies’ financial information – everything from revenue, profit, debt and history of paying dividends – is hard work and time consuming.

So how can an adviser help you?

She or he can help you sort through all of that. And besides, it’s nice to have an expert as a sounding board when you need an opinion.

Before looking for a pro

Experts say that even before hunting for an adviser, you should do some homework of your own – and that means some basic education.

  • The Internet is full of good basic information and advice for investors. The best part? It’s free . Just be careful where you look.
  • Investors can find a wealth of reputable information on the Ontario Securities Commission website and other well-known investing and news websites, including The Financial Pipeline, Financial Post, MarketWatch and Business News Network.

Finding an adviser to suit your needs

In general, finding a financial adviser is fairly straightforward, but they come in various categories.

For example:

  • If you walk into a bank, you could get steered to an adviser who specializes exclusively in mutual funds.
  • An investor looking for more variety can hire a fee-only advisor, who would charge a flat fee or a percentage of the portfolio.
  • For those lucky enough to have at least $500,000 to invest, this can open up a world of more personalized service with fees that are more negotiable.

Time for a serious talk

Even before the two parties get down to discussing goals, a serious conversation has to take place that starts with an important question: How does the advisor get paid?

  • You might think this is rude but you need to know this because many advisers operate under a conflict of interest. For example: if you walk into a bank branch and they only recommend their own mutual funds.

It's a two-way street

Now it’s time to discuss goals. It’s also totally unrealistic to expect the adviser to do all the heavy lifting in the relationship, so the client has to make a meaningful contribution to the discussion.

  • Any analyst worth his or her salt will tell you they want the client to come in with a list of questions.
  • At the very least, you should go into the meeting armed with basic information such as when you want to retire, how much money you think you need in retirement and how much risk you are prepared to take on to get where you want to go.
  • It’s pretty useless to tell the advisor that you just want as much money as you can lay your hands on. After all, isn't that something we could all say?

Smart Tip provided by The Financial Pipeline. Founded in 1996 by a group of portfolio managers, The Financial Pipeline is dedicated to providing financial knowledge and education to anyone and everyone with even a passing interest in finance. Our motto, “Financial Information For the Rest of Us,” speaks for itself.

The material on this website is provided for entertainment, informational and educational purposes only and should never act as a substitute to the advice of an applicable professional. Use of this website is subject to our terms of use and privacy policy.
Close menu