Financial advisor - do you use one?
 

Any of you use a financial advisor? If so, what are your opinions of your advisor? Would you recommend them? If not, why?

I'm not exactly the most financial savvy, and I'm looking for advice on how to manage my finances. Sure most people will say "do it yourself", but to be honest, I don't feel I'm savvy enough or have enough smarts or patience to do this.

If you've used one (or are using one), what are your thoughts on your advisor? I'm looking for some recommendations for some advisors around town that people think do a good job (and potentially ones to avoid as well).

if your portfolio is under 25k, there is no point to get one in most cases. The best is really to read up on financial info, not only you are better prepared for your future, you can tell if your future advisor is a real deal or just blowing smoke into your face.

UNLESS,

your annual income is going to be >60k in the year. In which case, first get an accountant THAN an financial advisor.

just my 2 cents.

Hmm...my portfolio is easily over 25k. Income is also well over 60k as well.

Just out of curiousity - why do you suggest an accountant over a financial advisor? Is it more that they know the in and outs of tax law to maximize deductions, etc?

I have read up a little on financial info, but to be honest, it goes in through the eyes and doesn't get processed in the brain. :D I guess it doesn't help that a lot of the advice out there is just "opinions" as well, and should be taken with a grain of salt. I guess I'm looking for someone who can help me structure how I should invest (i.e. how to diversify my investments and how much to contribute where, etc). Whether it be an accountant or a financial advisor - I guess I just need help since right now I'm not really getting it done.

agree, get a good acct first. most accountants/tax pro's know a thing or two about finance. they might be able to recommend u someone.

pick up some of the basic finance books.

the reason why an acc comes before a FA is for you to know where to invest to minimize the tax impact. CRA IS A BITCH when it comes to capital gain. After you are sure that your tax burden is minimized should you start investing.

quite true, but they go hand in hand acutally. FA and Accountant.

FA's does your entire financial picture, while taxes are major part of allowing you to achieve your financial goals - long and short.

FA can recommend good accountants too.

^ that is true, its just me that I prefer to have an acc first when my portfolio is relatively small, than go to an FA when it becomes unmanageable for me, since I dont know much about tax, and CRA is the anti-buffett that sucks my blood dry.

Yes, I dislike CRA, and there is nothing I can do. :)

Honestly, FA's for the most part are useless.

It is YOUR money. Why trust someone else with YOUR money? Read and learn for yourself and then make your own choices. These days, most advisers pick a mutual fund and cookie cutter you into the same program as everyone else.

They will look at your age, ask about your risk, and then put you in mutual fund A B C or D.

I had a financial adviser looking after my stuff but honestly, he's making money off me when I could just do the same thing myself and better at that rate.

Make sure you pick someone who is not fee based and make sure you know what you're buying into and why etc.

Hope that helps.

My Financial Accountant is my car... and the only thing I ever hear from that bitch is.. "I need more money" :(

Berz out.

well then you are financially fucked
Unless your car has a brother named KITT. :haha:

I agree with Chuck and believe FAs are pretty much worthless, but didnt want to say it out loud because I hope someday I can be one, and gamble with my clients money :haha:

syee I don't know your situation.....but....
I don't see the point of having an accountant if all you have is employment income, rrsp's and some investments.....

FAs are scam artists.

oh you will be surprised how much CRA is taking from an option trade

haha just become a hedge fund manager if you wanna gamble with peoples money..

how are earnings from options taxed?

I've had several FA's over the years. I've experienced one alarming trend. A staunch buy and hold strategy. When things look grim they may shuffle your portfolio around but pulling out of the market temporarily is never suggested as a risk avoidance strategy. In fact, I've encountered significant resistance when I've tried to put my money on the sidelines.

Over the last 6 months everyone I've talked with that has kept their FA has experienced the full impact of the market decline. They probably heard the same things I did; "you're in it for the long haul", "now is the time to buy more shares", "it will average out". Their advisers did nothing significant to mitigate their huge losses because pulling back was never an option. Their existing assets could have purchased a lot more shares if they sat on the sidelines for at least part of the decline and then reentered the market when it was lower. They continued to be told (not in so many words) "buy whenever, hold until you retire".

I'm sure some of you have received much better advice but this seems to be the prevalent approach.

Actually I haven't gone for any advice. I'm still hanging on to my cash (as well as 2 years worth of RRSP's that are sitting in a cash account which I guess I would consider myself lucky with) so I'm looking to see what the best approach would be.

I'm not sure whether pulling out right now is a good option. It goes against the whole buy low sell high philosophy that everyone preaches. Unless you have a dire need for the money, I sure as hell wouldn't pull out any of my money at the moment. They do have somewhat of a point in asking you to buy now as you're buying low, and the dollar cost averaging will hopefully put you back on par once things settle down.

I'm not sure what you were referring to regards to sitting on the sidelines for the decline - are you referring to your position before this "global recession" occurred, or are you talking about now? The low point is probably anyone's guess.

The reason why I was looking for advice at this point was to:
1. Take advantage of the lower prices and the cash I have sitting around.
2. Invest in something with a larger return than the 2 or 3% I get from ING. I'm willing to take a bit of risk, but I wanted to be smart about it. I was hoping an FA might be able to help me with how to allocate to maximize gains and minimize the risk (or at least balance them out). I'm far from being financially savvy, and hence, if I'm not good at it, I'd rather pay someone who is to guide me.

I guess what I was looking for was people who have had good (and bad experiences) with folks around GVA rather than going in blind looking for an advisor. I think personal recommendations are much better than picking one out of the yellow pages.

long haul statement but only if they buy every 2 weeks from their paycheques. Dollar Cost Averaging. If it was big lump sum. Well then, thats a different look. As also did the FA's consider their goals - short and long?

I broke the ties with my FA and went to a mostly cash position before the decline. However, there were periods of time prior to last year where I was bearish about the markets, he was bearish about the markets, yet the only option as far as he was concerned was to leave my money in the markets and tough it out. Why? If both you and your financial planner think things look bleak in the next while why not avoid the risk by temporarily implementing a different strategy? I've done that with more than one FA in the past but it took some arm twisting.

I agree that now might not be the time to pull out. I'm keeping an eye on things to determine when I want to reinvest my money more aggressively again.

I understand dollar cost averaging. But what about the big lump sum that is one's savings? Let's say you already had a million dollars invested in mutual funds (or something else for that matter) and were convinced that a significant decline was coming or already in progress. Would you just leave it fully invested and do little while watching it drop to half its value? This is what nearly everyone has actually done because this is the advice that was given to them.

Then that means they have bad advisors, most FA do recommend they stay in the market, and not pull out of the market entire. However, if i invested a 1 time chunk @ million. I would re-structure his portfolio, to minimize the losses totally. You have to consider the tax implications as well right. To pull out to a full liquid, tax = eat you in the rear.

In this market, WHEN do you leave the market? What is the right itme? to get back in? Most people don't want that headache. If they can't sleep at night because of the money they might lose, I would tell the people i'm investing for, get out. Do a GIC/Term and so you can sleep well.

It depends on each client, I would take ADVICE from the FA, ultimately they are advisors, it's your money. Take into account what you think and feel, take their advice. If you find that what they say is right. You just have to bite the bullet and take the lumps. (if you don't change anything in your portfolio, and if you got ultra risky MFs/Stocks, and you still listen to the FA and keep everything status quo, he's either the world's shittiest FA or you're the dumbest man/women alive.) Each 6months -1 year you should be tweeking your portfolio. Or seeing your FA about the situation.

The entire market - out of like what, i think Canada has over 1000 Mutual funds. Only 0.5% made profit this year. thats 5 out of 1000.

of course they will tell you to keep your money in the market, what do you think will happen if all mutual fund and pension fund sell their positions, the stock market tank further. and honestly dollar cost average is over hyped, if you did your homework and believe market will drop further, sell 75% of your position and wait on the sideline.

actually, if anyone did their homeworks, they will know that 99% of the mutual funds at best perform at par with market :D

But if everyone did their HW - no one else would be doing anything but looking @ the market.

:D

Even those who do their homework (or do it for a living) had to eat a loss last year. The famed Berkshire Hathaway lost 62% last year. Homework can only do so much.

Hindsight is 20/20. If anyone knew this was coming, I'm sure they would have got out as soon as they could. The truth is that nobody saw it and everyone's been burned a little bit.

actually, if they knew this was coming, they would have shorted like crazy.

I think someone in GS did, so did some guys in JPM. :D

But you are right, the best you can do with the market is a guesstimate. However, with its size and predetermined portfolio standards it needs to adhere to, MF are 99% stuck. Not only will one suffer from market loss, it will also suffer from the withdrawal, leading to a deeper selling and more withdrawals. Throw in management fee, that translates into bad.