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When is it time to ditch your Advisor?

Recently I read an article in Money Sense Magazine all about Financial Advisors getting rid of the clients that don’t make them enough money, pawning them off on newer advisors. “An old advisor’s junk is a new advisor’s treasure”, to quote one line out of the article. I wish I could tell you that this doesn’t happen in the industry, but it does.

So I say, why not turn it around, is your Advisor good enough for you? There are plenty of great advisors out there, but there are also many that could or should be providing much better service to their clients.

Having said that, I have put together a little test for you to evaluate your advisor and determine if he or she is worth keeping around.

Accessibility:

1. The last time I met with my advisor was:

1. Less than a year ago
2. 2 years ago
3. 3 years ago
4. Over three years ago

2. My Advisor calls me:

1. At least annually to check and make sure all is well
2. Once in a while
3. Only when I call them
4. Never

3. In the recent downturns in the market, my Advisor called to make sure that I knew what was happening and what it affects it might have on my financial plan:

1. Yes
2. No

4. If I call my advisor and leave a message, they usually return my call:

1. That Day
2. Next day
3. Within a week
4. Never

Diligence:

5. When starting something new; investment, insurance policy, etc. my Advisor:

1. Explains everything to me in a manner that I understand.
2. Try’s to explain but uses too many acronyms, losing me after the first sentence.
3. Says, “Just trust me it’s the perfect product for you”.

6. When starting a new investment my advisor:

1. Does a thorough risk tolerance questionnaire to determine what investments are appropriate to my current lifestyle.
2. Asks some general questions about the risks of investing, to get an idea about my risk tolerance.
3. Assumes they know me well enough to decide on their own what is best for me.
4. Has a list of investments up on the wall and throws a dart to determine which one would best suit my needs.

Continuing Education:

7. My advisor attends regular meetings and seminars to stay current with the ever changing industry:

1. Yes
2. Don’t know
3. No, takes up to much of their valuable time

8. My advisor is working towards, or already has some form of professional designations, such as, CFP or CLU:

1. Yes
2. Don’t know
3. No

General Service:

9. When setting up initial plan, my advisor:

1. Took the time to go over all aspects of my financial plan, covering: Investments, Liquidity, and Risk Management (Life and Disability Insurance, Critical Illness etc.
2. Quickly checked to make sure that I am comfortable with what was currently in place.
3. Cover only the areas that he or she specializes in, i.e. just insurance or just investments.
4. Never set up an initial plan.

10. When meeting for a regular review, my advisor:

1. Asks lots of questions to make sure that everything is up to date, if changes need to be made, makes several recommendations on how the plan can be improved.
2. Makes some recommendations based on issues I happen to bring up.
3. Just tries to sell me something new, assuming that I must need it.
4. We don’t meet regularly for reviews.

Scoring:

A = 10 points
B = 6 points
C = 3 points
D = 1 point

If your advisor scored:

86-100 Points – Call right now, congratulate him or her on the great job they’re doing,  
and thank them for taking such great care of you.

65-85 Points – You can wait until the next time you see them to say thank you, they’re
doing a pretty good job, but they’re no hero.

35-64 Points – Keep you’re eye on them, and keep an eye out for a new advisor. You
deserve better!

10-34 Points – Ditch them quick, your funds are probably all back end loaded though, so
try to find an advisor who can accommodate your investments without incurring large fees.

Well I hope you have found this little survey useful. Overall the most important thing is that you’re working with someone you trust, and get along well with. Don’t be afraid to shop around and find the one that’s right for you, because it is important. This is your life and your future we’re talking about, so make the right choice.

 - Dream Big…Let’s make it happen!

Special thanks to Ryan for submitting his article to Kids Kingston. You can contact Ryan at:
Freedom 55 Financial
613-544-9600 ext. 251
www.ryanwood.biz