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Choosing the right financial adviser

Just as picking the right opportunity for your money is important, choosing a financial adviser that’s registered and matches your needs is critical when it comes to wise investing. A good financial adviser may help you manage your wealth and build a sustainable future based on YOUR risk tolerance, goals, experience and stage in life. As a key member in your investment journey, here are four questions to ask when looking for the right financial adviser that matches your needs.

1) Are you registered?

The first step any investor should take when looking for a financial adviser is to ensure they are legally allowed to be trading or advising in securities or managing investment funds. By law, individuals who are trading and advising in securities, including stocks, bonds, mutual funds, and ETFs, must be registered with the provincial or territorial securities regulator of the province in which they are doing business. Registration may help protect investors from investment fraud because securities regulators will only register firms and individuals that are properly qualified. Albertans can easily determine whether their financial adviser is registered by visiting checkfirst.ca and checking the registration of any individual or firm that is in the business of trading or advising in securities or managing investment funds, as well as if they have a record of any disciplinary actions.

2) How are you paid?

There are a variety of ways financial advisers are compensated, including salary, commission, flat fees, or a combination of these methods. When a financial adviser is paid by salary, the cost of their advice is included in the prices of the products you buy, whereas others may charge an hourly rate or a percentage of the assets in your account. As an investor, you have the right to obtain disclosure on how your financial adviser is compensated, as well as any costs paid to the registered firm associated with your account. This information may allow you to properly assess if a financial adviser meets your investing budget and help you avoid unwanted fees or charges.

3) What kinds of products and services do you offer?

Not all financial advisers offer the same products and services or have the same levels of expertise. While some can offer a wide range of options, others may specialize in only certain kinds of investments and only deal with clients who have certain levels of risk tolerance. If you are new to investing, working with a financial adviser that offers fewer products and provides more guidance may be more helpful. If you are a more experienced investor, you might want an adviser that offers more products and allows you to customize your portfolio.

4) How will you help me reach my goals?

Your goals from investing are unique to you alone, and no one investment portfolio will work for everyone. Before working with you, financial advisers should understand whether your investments are for financial security, income, long-term growth or something specific, such as retirement. Additionally, financial advisers will ask you about your financial situation (including your stage of life and any big expenses you might have coming up, such as a house purchase or paying for a child’s university tuition), investment knowledge, and risk tolerance. It’s important to be honest with your financial adviser so they can make recommendations that are appropriate for your needs. And remember to ask questions about anything you are not comfortable with or are unsure about.

Overall, take your time when choosing your financial adviser because this decision may be just as important as the investments themselves. Remember: financial advisers are working for YOU. By conducting the proper research and asking the right questions, you can ensure that you are working with a financial adviser with the expertise, products, services and fees that best align to your needs in order to meet your financial goals.

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