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    Tips For A Successful Relationship With Your Investment Advisor

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    This document provides tips for clients to have a successful relationship with their investment advisor. It outlines steps for clients such as reviewing their risk profile, meeting regularly with their advisor either in-person or online, understanding their account statements, clarifying the types of mutual funds they hold and their purpose, understanding their advisor's areas of expertise, and actively communicating with their advisor, especially during difficult markets. The document stresses the importance of open communication between clients and their advisors to ensure investments continue to match risk tolerance and needs.

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    Tips For A Successful Relationship With Your Investment Advisor

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    This document provides tips for clients to have a successful relationship with their investment advisor. It outlines steps for clients such as reviewing their risk profile, meeting regularly with their advisor either in-person or online, understanding their account statements, clarifying the types of mutual funds they hold and their purpose, understanding their advisor's areas of expertise, and actively communicating with their advisor, especially during difficult markets. The document stresses the importance of open communication between clients and their advisors to ensure investments continue to match risk tolerance and needs.

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    This document provides tips for clients to have a successful relationship with their investment advisor. It outlines steps for clients such as reviewing their risk profile, meeting regularly with their advisor either in-person or online, understanding their account statements, clarifying the types of mutual funds they hold and their purpose, understanding their advisor's areas of expertise, and actively communicating with their advisor, especially during difficult markets. The document stresses the importance of open communication between clients and their advisors to ensure investments continue to match risk tolerance and needs.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views4 pages

    Tips For A Successful Relationship With Your Investment Advisor

    Uploaded by

    api-133771165
    This document provides tips for clients to have a successful relationship with their investment advisor. It outlines steps for clients such as reviewing their risk profile, meeting regularly with their advisor either in-person or online, understanding their account statements, clarifying the types of mutual funds they hold and their purpose, understanding their advisor's areas of expertise, and actively communicating with their advisor, especially during difficult markets. The document stresses the importance of open communication between clients and their advisors to ensure investments continue to match risk tolerance and needs.

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    of 4

    TOMSETT WEALTH MANAGEMENT GROUP

    THE CLIENT / INVESTMENT ADVISOR RELATIONSHIP

    TIPS FOR A SUCCESSFUL RELATIONSHIP WITH YOUR INVESTMENT ADVISOR


    Difficult markets require active communication to ensure the investments in the clients accounts reflect the changing markets. The steps below outline a few proactive suggestions for investors in their discussion and direction to their Investment Advisor.

    Review your documented Risk Profile


    When you opened your account with your Investment Advisor, you completed a document that relates to your Investment Risk Profile. It is this information that the Advisor uses to establish what Asset Mix will apply to your investments; for example, what percentage of your funds is held in stocks, bonds and short term money market. During difficult markets, your risk tolerance may change. Ask your Advisor to explain what your current stock exposure is, percentage-wise. Advise him/her if this Asset Mix should be amended. More importantly, is your Asset Mix in accordance with your documented Risk Profile?

    When was the last time you met with your Investment Advisor face to face
    Meeting your Advisor on a regular basis (annually or semi-annually) is a good practice for both parties. It allows for a full review of your account which includes: Updating any documentation Discussion of any material changes in your personal/financial life Portfolio performance A full analysis of your current portfolio A reassessment of your risk profile and asset mix Discuss any additional services required. i.e. retirement analysis; insurance needs; charitable giving; business succession planning; estate analysis Commentary from your Investment Advisor on his/her market perspective If you havent had a meeting recently, then call and arrange a date with your Advisor. If it is difficult for you to meet face to face, then book a telephone meeting with them. Ask the Advisor to forward any reports to you in advance, which will be referred to in your discussion. Alternatively, your investment advisor may arrange an online meeting with you.

    Betty Tomsett Director, Wealth Management Investment Advisor Tomsett Wealth Management Group Richardson GMP Limited 145 King St West, Suite 500 Toronto, ON M5H 1J8 Tel 416.969.3017 Fax 416.969.3035 Toll Free 866.205.3548 Betty.Tomsett@richardsongmp.com

    http://dir.richardsongmp.com/bettytomsett

    Do you understand your statements


    It is easy to be casual about our investments when markets are strong and performing well. In fact, a sense of complacency can easily set in. We hear the old mantra of Buy and Hold. This philosophy is acceptable during long term bull markets. However, in long term bear markets, a Buy/Hold strategy can be very costly and painful. It is therefore important for clients to understand what they own and to review your statements regularily. If you are unclear on any holdings then call your Advisor and ask them to explain what they are. Remember, it is in your best interest to be comfortable with your investments. It is also helpful to your Advisor if you are familiar with your statement. Thus, any problems or concerns can be addressed immediately. Again, an online meeting arranged by your Investment Advisor allows for a visual explanation of your statement.

    The matter of Mutual Funds


    Years ago when interest rates started to drop there was an exodus of money leaving GICs and heading for the stock markets. The investment community reacted by introducing Mutual Funds as an investment option. Many Advisors gradually moved from recommending individual stocks to a more pooled approach to investments. The task of individual stock picking moved from the Advisor to the mutual fund manager. The benefits to clients were numerous. Over the years, however, this class of investment became prolific and confusing to many clients. Like any investment, it is important to understand what they are. Many clients are unaware that mutual funds can be as volatile as stocks. Also, some investors believe that a bond fund is guaranteed. They are not. It is not unusual for clients to have a large number of funds in their portfolio. If so, it is especially important that you ask your Advisor a few questions. Are these funds invested in the stock market or are they in Fixed Income (bonds, preferred shares) If you have Balanced funds, what percentage of your account is in the stock market If you have numerous mutual funds, you may ask your Advisor to give you a consolidated breakdown of your total funds and what percentage is in the stock market Confirm that the Asset Mix of your account, including mutual funds, is in accordance with your Risk Profile as set out in your Account Documentation In the event you and your Advisor agree to make changes to these holdings, be sure to ask about the costs of making the changes. Fees/commissions should never get in the way of making the right investment decision, but awareness is important. For example, if there are fees to selling some of your mutual funds, you may wish to simply switch these funds into another fund within the existing mutual fund family. This way, you may still adjust the portfolio without incurring significant fees. Also, with those funds where a selling fee might be incurred, the Advisor would likely offer to at least sell some of your units that are now free units. Your Advisor will explain in more detail.

    What are your Investment Advisors areas of expertise


    As global events change, so does our need for different investments. An investor should be clear at the outset as to the qualifications and experience your Investment Advisor has. These days, Investment Advisors can offer everything from stocks and bonds and preferred shares to mutual funds, hedge funds, private equity, options and futures contracts (subject to their licensing designation). Due to the variety and complexity of these investments, a wise Advisor may limit their field of products.

    If your Advisor only recommends Mutual Funds, then ask if you will be well served when the need to own Fixed Income in the form of bonds and preferred shares arises? The area of Fixed Income is highly complex. A Bond Mutual Fund is very different from the physical bond itself. So be sure to explore this topic and satisfy yourself that the Investment Advisor is experienced in those products that are appropriate for you.

    This is YOUR account


    Regardless of your experience in financial matters, you must remember the above statement. No doubt, you engaged the services of your Advisor as you felt you would benefit from the professional advice. In almost every case I would agree that you should heed your Investment Advisors advice if you have been pleased with their past performance and your relationship. However, in difficult and more uncertain times as we are now experiencing, I believe a client should also be guided by their own instincts according to your sense of comfort. If market activity is causing you discomfort and loss of sleep then you need to discuss this. A wise Investment Advisor will know to act on your direction, after having discussed the issue with you. Also, a great deal of your comfort comes from the frequency of communication from your Advisor. It is necessary to know his/her views and strategy in these times. It suggests that their hands are on the wheel.

    Squeaky wheel gets the grease


    There is no question that current market activity is overwhelming to all of us in the investment industry. Managing clients investments at an individual account level is complex at the best of times. If you have not had a conversation or communication from your Investment Advisor recently, then call them. You have hired them to serve your investment needs and communication is one of the top priorities.

    Revisit your Advisor


    With the suggestions of this guide in mind, ask yourself the following questions: Does my Investment Advisor keep in touch with me Do I have confidence in their ability to guide my investments appropriately Do I believe my Advisor is well informed regarding markets and economic events Is the relationship professional and one of mutual respect Are they qualified and experienced in the investments appropriate for me Is my Advisor listening to me when I express my concerns and views Following this basic process, you may have a better sense about your relationship with your Investment Advisor. If it is a positive one then you are likely in good hands. If however, you feel there are grey areas in the relationship then you need to discuss this with your Advisor. It is difficult to fix something if we are not aware it is broken. In the end, if you are still concerned, then you may wish to consider changing Advisors. If that is necessary then allow your new Advisor to guide you on the best way to end the relationship. They will explain the process and offer support to those who find it difficult to make the change.

    About Betty Tomsett


    As a senior Investment Advisor, my clients have full access to a very comprehensive package of investment and financial services that is relevant to their individual needs at all stages of their life. We integrate my investment management expertise with the professional advice and direction of our Wealth Management and Insurance specialists. In addition, the style of my practice is very client centric by ensuring constant intercommunication and access to the essential financial services. In 2008, we moved the majority of clients investments from the stock market into bonds and short term investments well in advance of the market selloff. As a result, clients participation in the market debacle was very minor. Clearly, a closer relationship makes for the best results. If you would like to receive a second opinion on your investments, I welcome your call.

    The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the authors judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. Richardson GMP Limited is a member of Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.

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