Making the Most Relationship from Your Financial Adviser « ledgerleads_blog

Making the Most Relationship from Your Financial Adviser



April 12th, 2016

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Think of your relationship with your financial adviser as a partnership, with both of you working to achieve your financial goals. You both have responsibilities in making it a success. And like in any relationship, open and honest communication is key.

What you should expect from your financial adviser

The role of your financial adviser is to give you helpful, informed advice as you build and carry out your investment plan. Your financial adviser is obligated to deal with you fairly, honestly and in good faith and to recommend investments that are suitable for you.

To do this, your financial adviser will need to take the time to get to know you and get a clear understanding of your financial situation, your goals and how you feel about risk. Once your plan is in place, your financial adviser should tell you about investment opportunities and any changes that could affect your investments. They should be available to answer your questions, especially during market lows when you may be tempted to act on your emotions.

You can expect your financial adviser to:

  • make clear and specific recommendations
  • explain the reasons for the recommendations
  • point out the strengths and weaknesses
  • outline the risks involved

Your financial adviser must get your permission before they take action like buying or selling investments for you, or withdrawing money from your account. The only exception is if you have given your financial adviser “discretionary” authority. Your financial adviser will send you a written confirmation of any transactions they make for you and will send you regular account statements.

What you should not expect from your financial adviser

Your financial adviser will not be able to:

  • predict the performance of the markets with certainty
  • recommend investments that are always profitable
  • act on vague or general instructions to buy or sell investments
  • meet unrealistic goals or expectations of profit

Your responsibilities as a client Advisers appreciate clients who are clear and honest about their financial situation and expectations because it means they can give better advice. Remember, you are paying for this advice.

Here are some things you can do to make the relationship with your financial adviser a productive one:

  • Be prepared for each meeting. Treat each meeting with your financial adviser like a business meeting. Take some time before the meeting to review your investments and jot down what you want to discuss. Bring all relevant information, such as recent account statements and tax assessment forms.
  • Ask questions and take notes. Make sure you understand the investments your financial adviser recommends and how they fit with your plan. If you don’t understand something, ask for clarification. Take notes of conversations you have with your financial adviser and what you agree to.
  • Be informed. Read documents that you receive about investments you’re considering. Learn as much as you can about the investment world through courses, books, newspapers, websites and other media.
  • Stay on top of your investments. Keep a file of all account-related documents such as transaction confirmations, account statements and tax slips. Review these documents as soon as you get them. Make sure they reflect what you discussed and contact your financial adviser right away if there are any problems.
  • Keep your financial adviser up to date. Tell your financial adviser when your personal or financial circumstances change. Major life changes such as marriage, the birth of a child, divorce or the death of your spouse can have a significant impact on your financial well-being and the types of recommendations your financial adviser makes for you.
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