She’s an intelligent 50-something single mum – and she hates meeting with her financial advisor.
“He doesn’t answer my emailed questions about my finances and all the statements and other documents he sends me,” she told me.
“‘We’ll go over that when you come in for our meeting,” he says, so she asks them again in person.
“I make notes and sort of understand what he’s saying at the time. But a few days later I still don’t feel I have the information I need.”
My friend simply wants to know the annual yield of her RRSP, TFSA and non-registered money the advisor put into three of his company’s mutual funds.
“He sends me fund performance figures and management expense ratios, but I want to know what percentage return my money is getting while it’s been in those funds, and how much in dollars I have paid for his services.”
With her retirement in mind (“I was aiming at Freedom 55 but now he tells me that’s not going to happen”), she panics every time she sees her total assets fall back.
“I know I should pay more attention to my finances,” she said, “but isn’t that what I’m paying him to do?”
Unfortunately, it’s a story I hear far too often.
Yes, the advisor should explain in writing, in words – whatever it takes – so the client understands on an ongoing basis all aspects of their finances.
But the client must also make the time and effort to become, with the advisor’s help, knowledgeable enough to know what questions to ask and to understand the answers.
If you want to earn more than interest on a savings account or term deposit, there is no short cut for either the advisor or the client.
“Decide which investment(s) – guaranteed, stock market, real estate – you feel comfortable with, accepting that the more money you hope to make, the more attention you will have to pay to your finances and the more risk you will have to take,” I told my friend.
And just remember: nobody has as much at stake as you do.
Mike Grenby is a columnist and independent personal financial advisor; he’ll answer questions in this column as space allows but cannot reply personally - email firstname.lastname@example.org