Financial Education

Choosing an adviser

An adviser can help you:

• set your goals
• build a plan
• choose suitable investments
• track your progress
• adjust your plan, when needed

You can look to an adviser for answers to your questions about investment products and strategies. An adviser can also act as a sounding board for your ideas and keep you motivated to stay with your plan.

Choose an adviser who has the necessary qualifications and experience, who is registered with the Manitoba Securities Commission. Make sure you select someone who you believe is trustworthy, as it’s important to feel comfortable about whomever you choose to handle your finances.

Start by screening candidates over the phone. Find out if they are taking on new clients and work with people like you. Once you’ve narrowed your list, set up meetings with each candidate at their office. This will give you a sense of how they run their business.

Before making your final decision, consider how comfortable you would be working with your selected adviser. Does this adviser listen to you and answer your questions clearly? Do you have a good rapport? Think of your relationship with your adviser as a partnership: both of you are working to achieve your financial goals, and both of you are responsible for making it a success. Like any relationship, open and honest communication is key.

Expectations of your adviser

What you should expect from your Adviser

The role of your adviser is to give you helpful, informed advice as you build and carry out your plan. Your adviser is obligated to act in your best interests at all times and to recommend investments that are suitable for you. To do this, your 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.

After meeting your adviser for the first time, you may not know if you were asked too many questions, or perhaps too few. It may not be clear which questions are appropriate to answer, and which you avoid. Consider the following questions to help determine if your chosen adviser is collecting the right information and providing the service that’s best for you.

• What are your investment objectives?
  Your adviser needs to know your financial goals in order to make the best recommendations for you. Are you interested in safety of capital, income, or long-term capital growth?
• What is your age?
  Your age ties in with your short, medium and long-term goals. A new university graduate who is just starting to save will likely have different goals and risk tolerance than someone who has recently retired. As well, you must be at least 18 years of age if you are going to enter into a contractual agreement in Manitoba.
• What is your annual income and net worth?
  This information is used to determine your financial situation and make investment suggestions that are best suited to your financial ability.
• What is your occupation?
  Not everyone who works receives a pay cheque every two weeks. Some people are paid on commission, and some are seasonally employed. Gaps in your income may require short-term liquidity of investments.
• What is your tolerance for risk?
  Every investment has some amount of risk. An adviser needs to determine whether your risk tolerance is low, medium or high, and has to consider your age and financial situation, as well as how investment risk could affect you emotionally.
• What investment knowledge or experience do you have?
  Your investing knowledge or experience will help an adviser better understand your tolerance and familiarity with different products. How much or how little you understand about investing will determine the sort of investment vehicles your adviser can recommend for you.

As part of understanding your complete financial situation, your adviser may also ask if you have insurance, a current will, and/or adequate savings. He or she may need to know your personal circumstances (marital status, dependents, etc.), any estate planning you have considered, or any income tax issues that you may have.

What you should not expect from your Adviser

Your 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 adviser must get your permission before they take action on your behalf, such as buying or selling investments for you or withdrawing money from your account. The only exceptions are if you have given your adviser “discretionary” authority or you have given someone else trading authority or power of attorney over your account.

Client Responsibilities

Advisers appreciate clients who are clear and honest about their financial situation and expectations because it means they can offer better advice. It’s important to remember that you are paying for this advice. Ultimately, you will have to make the decisions and live with the results.

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

• Be prepared for each meeting.
  Treat each meeting with your adviser like a business meeting. Take some time before the meeting to review your investments and jot down what you want to discuss. Be sure to bring any relevant documents, such as recent account statements or tax assessment forms.
• Ask questions.
  Make sure you understand the investments your adviser recommends and how they fit with your plan. If you don’t understand something, ask for clarification.
• Take notes.
  Keep a record of the conversations you have with your adviser and what you agree to.
• Be informed.
  Read documents that you receive about any 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.
  Review your transaction confirmations and account statements as soon as you get them. Make sure they reflect what you discussed, and contact your adviser right away if there are any problems.
• Keep your adviser up to date.
  Tell your 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.