Top Tips for Selecting the Perfect Financial Advisor

Kandice Martinez
October 27, 2023

The Rising Demand for Expert Financial Guidance

In the wake of over three turbulent years marked by the pandemic and a tumultuous 2022 market, Canadians are gravitating towards financial experts to safeguard and grow their wealth. Ernst and Young LLP’s recent survey underscores this trend, revealing that many are looking to onboard or transition to new financial advisors. In fact, the 2023 EY Global Wealth Research Report indicates a whopping 45% are seeking superior wealth management—a rise of 24% since 2021.

Echoing this, a 2015 study from Montreal’s CIRANO Institute demonstrated that investors leveraging professional guidance saw a nearly fourfold increase in asset accumulation over 15 years compared to their unadvised peers.

So, with a hat tip to the B.C. Securities Commission, here’s a step-by-step guide to ensuring your financial advisor is trustworthy and the best fit for you:

1. Verifying Advisor Registration

If someone is selling investment commodities—be it stocks, bonds, ETFs, or mutual funds—they must be registered with local regulators. Regulating bodies not only track self-proclaimed advisors but also ensure they meet stipulated qualifications and maintain transparency regarding any unsavoury conduct.

Choosing a Competent Advisor:

Utilise the National Registration Search Database: Offered by the Canadian Securities Administrators (CSA), this platform lists registered advisors. If an “advisor” isn’t listed, tread cautiously. Request clarity and refrain from commitment until they appear on the list.

Know Your Advisor’s Specialisation: Different advisors specialise in various investment products. For instance, some are exclusive mutual fund sellers.

Decipher the Designations: While the term “advisor” is vast, certifications like FCSI (Fellow of the Canadian Securities Institute) or CSWP (Chartered Strategic Wealth Professional) distinguish advisors with notable expertise. Investment managers might flaunt CFA (Chartered Financial Analyst) or CIM (Chartered Investment Management) designations.

2. Research Past Disciplinary Actions

Ensure the integrity of your prospective advisor by consulting the CSA Disciplined List. This will help you understand any past indiscretions, albeit it won’t reflect advisors currently under scrutiny or negotiation processes.

3. Embrace Your Inner Detective

Harness the power of search engines. A simple name search can reveal a lot:

Official Profiles: Most advisors showcase their credentials, specialties, and accolades on their websites.

Media Mentions: Not all news is bad news. Some advisors might be celebrated for their strategic brilliance during challenging periods.

4. Engage in a Face-to-Face

Schedule a formal interaction, be it in person (safety allowing), over a call, or via video conference:

Inquire About Their Expertise: Seek clarity on credentials, investment methodologies, and especially the fee structure. Ensure you grasp what you’re being billed for.

Size Them Up: Understand their client base and the magnitude of assets they handle. This offers insights into their professional stature and success rate.

Let Them Know You: A proficient advisor will want to know your investment capacity, retirement aspirations, and risk tolerance. They should also be receptive to clients keen on comprehending investment dynamics and committing to regular investments.

Remember, while wealthier clients might typically garner more attention, the essence of a prosperous investor-advisor relationship lies in mutual understanding and growth. After all, their success intertwines with yours.