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Change the relationship with your advisor

Change the relationship with your advisor

July 5, 2012

couple shaking hands with a financial advisorYou don’t like your investment advisor and you are not sure what to do about it. This is a topic that resurfaces in the investment business fairly often.

Our suggestion is to focus on the aspects of the relationship with your investment advisor that they can control. The value of helping you with financial planning issues is a good start.

Will you have enough cash flow during retirement to maintain your desired lifestyle? What is your plan to help children or grandchildren with university costs? What are your most important financial goals? What plan do you have in place to reach those goals?

These are your life objectives and they are important to you. It is your responsibility to be pro-active and take control of your financial destiny.

Sometimes clients are uncomfortable with specific investment advice. Other times the lack of advice is an issue. Much of a client’s relationship with their advisor has to do with communication.

Couples will often say that some advisors talk too much or they don’t understand much of what is being said during investment meetings.

Investment advisors often speak using financial industry terminology which clients do not understand. Often there is a perception that the advisor is the authority figure where you are expected to be subservient and accepting of their direction.

So that is your dilemma. You want to move your portfolio to a different investment advisor, but we Canadians are often reluctant to change. A possible solution is to make a change by improving your relationship with your current advisor.

Schedule a meeting to talk about the issues that are of concern to you and plan a strategy to correct any problems. If the advisor truly wants to help you they will be receptive to your comments.

This is a first small step towards building a better relationship. The main difference is that you control the future of the relationship.

If you feel you don’t have enough meetings during the year then collectively agree on how many meetings should occur. Then establish who calls whom to schedule these appointments. If you are in control of the relationship then you ultimately lead the relationship.

The specifics such as retirement cash flow projections need to be addressed to make sure you can spend what you want without running out of money during your retirement years. Tax planning is important too.

If your advisor does not have sufficient skills in all technical areas such as retirement planning, tax, insurance or estate planning then request they ask a colleague for advice when technical assistance is needed.

Your ultimate goal, when planning is to project what your retirement will look like and ensure you understand the tax laws. Your investment approach should include minimizing taxes by making sure tax planning strategies are in place to make use of existing laws.

The current problem you may have with your investment advisor could be related to communication and the business process. It is important to improve your working relationship. This could be as simple as changing the dynamics of your relationship with your existing advisor.

The popular expression “when the child becomes the parent” best exemplifies this change in a relationship.

In the spirit of improving your existing relationship with your investment advisor, now is the best time for you to assume the leadership role.

You determine what you want out of the relationship based on your investment needs. Be pro-active and take charge. Control your own destiny.