Most people don’t know how their financial advisors manage their own money, although the situation is improving.
Hennick Wealth Management’s 2017 survey showed 33 per cent of Canadians know how their advisors invest, compared with 26 per cent a year earlier.
Also, last year 48 per cent were too shy to ask, down from 57 per cent the previous year.
Women are more likely than men to say they haven’t asked their advisors about their own investments (54 versus 43 per cent).
But with only one-third who do know about their advisors’ financial approach, we still have a long way to go.
Professionals shouldn’t hesitate to share their own money management strategies with their clients, to show they practise what they preach – even to reveal their (hopefully only occasional) failures as well as their successes.
And it’s important to take advantage of a financial advisor’s specialized knowledge and skills.
After all, as the financial planning industry is quick to point out, the average individual wouldn’t tackle complex medical procedures or car repairs.
The risks most people run is (1) they don’t know what they don’t know, and (2) they are reluctant to reveal their lack of knowledge.
But that’s the very reason you need to have a relationship with somebody skilled in the field of financial planning – whether it’s a generalist at your local banking institution, a (stock market, real estate, insurance, etc.) specialist, or an advisor trained in dealing with most, if not all, personal money matters.
Even if you use the variety of financial planning tools available online, you should periodically check with a live advisor to confirm you are on track, given your personal situation.
If you are dealing with individuals who offer their advice free because they earn their living by selling financial products, you need an advisor more interested in your well-being than her or his sales commissions.
If you deal with a fee-only advisor, make sure you confirm their professional qualifications and track record … something you should also do for advisors who sell products.
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 mike.grenby@gmail.com
