An advisor can help you set your goals, build a plan, choose suitable investments, track your progress and adjust your plan, when needed. An advisor can answer your questions about different investment products and strategies and act as a sounding board for your ideas.
That’s why you should take charge when you are considering working with potential advisors and ask them some key questions before making your choice.
In its brochure, Questions to Ask when Choosing a Financial Advisor (pdf), the Canadian Securities Administrators (CSA) suggests investors ask a potential advisor the following questions:
1. Are you registered?
Registration helps protect investors because securities regulators will only register firms and individuals if they are properly qualified.
2. What is your background?
You want someone who is qualified and has the right experience to give you the help you need.
3. How are you paid?
Advisors can be paid by salary, commission, a flat fee, or a combination of these methods. Find out how the advisor is paid, how much their services will cost you and what services you'll get for your money.
4. Which kinds of products and services do you offer?
Not all advisors offer the same products and services or have the same expertise. Some specialize in certain kinds of investments. Others can offer you a wide range of investments and services.
5. Who are your clients?
An advisor's job is to help you work toward your financial goals. It will help if the advisor has a good track record with clients like you — people with similar backgrounds and goals.
There are many resources to help you decide if an advisor is right for you and your investing needs.
- Know Your Advisor, from the BC Securities Commission’s investright website.