As this important time for your personal finances approaches, it is important that you evaluate your financial advisor to ensure their expertise.
“The mistake we make is judging our advisor based on our investment statement. For example, if the return is negative, my advisor has failed, but in reality it is worth more and we can look at something else,” explains financial planner at Jutras Gestion de patrimoine Jean-Sébastien Jutras.
To properly assess your advisor, this expert recommends that you ask them a few questions.
What are your qualifications and area of expertise?
Your financial advisor may have multiple areas of expertise, but distinguishing the differences between a financial security advisor, a collective savings agent, a full-service advisor, and a financial planner varies.
What does your compensation package look like?
“There are people who demonize people who get paid with a commission, but in reality you have to understand that it's not a bad thing because they want to give you the best possible service in order to keep the commission.” We can't have one “Demonize one compensation formula more than the other,” he says.
Can you create an optimized retirement plan?
“Ask your advisor if they are able to create optimized financing plans, because if the answer is no or I'm not used to it, you may find another advisor on the market that can give you the same thing at the same price can offer costs,” emphasizes the expert.
How often will we meet?
“There are fewer and fewer advisors on the market. So if you ask the question from the beginning, you will have an idea from the beginning (…) You must meet your financial advisor at least once a year, but also every time in your life your situation changes, for example in retirement the birth of a child or the death of a loved one, it is always a good idea to meet with a counselor again.”
How much do your services cost and how do we measure the success of my goals?
“When advisors tell you that their services don’t cost anything, that’s not true, because within the fees you’re going to pay, there’s a fee that goes to the advisor, the financial institution, etc.”
Therefore, it is easier to estimate your return on investment if you know how much the services cost
Watch the full interview in the video above.