Your first meeting with a financial advisor is important. You can prepare for the conversation by considering your investing goals, determining questions for your advisor, and thinking about how you want to work with them.
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What should you expect from your first meeting with an advisor?
Whether you’re meeting with an advisor for the first time, or making a change from one advisor to another, your first meeting is important.
This meeting sets up the kind of work your financial will do to support your investing goals and financial plan. It’s a good idea to be prepared to talk about your investing experience, goals, and what you need the advisor to help you with.
Ideally, your first meeting with an advisor should cover:
- Why you’re investing (your short- and long-term goals), so your advisor understands what you want your money to do for you and when. Your advisor may help to prioritize these goals.
- How much you know about investing, including the types of investments or accounts you’re interested in, and why.
- Your financial situation, including what you own, owe and earn.
- How much risk you’re willing to take, and over what period of time (your time horizon). Your advisor may show you examples of different portfolios with different risk levels, and ask you which of these you’d be more comfortable with.
- How you’ll work together, including how often you’ll meet, and whether you prefer to meet in person, over the phone, or digitally.
- What fees you’ll pay for the service, and the type and frequency of account statements you can expect to receive.
- Adding a Trusted Contact Person to your account.
Consider which of these questions you may need help with, and make time to talk them through when you meet with your advisor. If they aren’t qualified to help with something, they may be able to recommend another professional who can.
You and your advisor will likely fill out a new account application and Know Your Client (KYC) form. This is an important part of ensuring you are getting the service you want from your advisor. It is also required by securities law that your advisor knows your financial situation, investment objectives, knowledge, experience and risk tolerance.
Your advisor should be clear about products and services they offer. They should discuss fees, how they are paid and explain the risks and returns of their recommendations. They should also recommend investments suitable for your situation. They cannot guarantee the market will perform in a specific way, achieve unrealistic expectations, always recommend profitable products, or buy or sell investments without clear instructions from you.
There are different types of financial advice providers available in Ontario. The type of advisor you work with will depend on the type of advice you are seeking and the type of financial products and services they offer. It also important to think of practical considerations, such as whether it’s easy for you to meet with them. Learn more about choosing a financial advisor.
What are your responsibilities as an investor?
Your advisor works in support of your needs, not the other way around. That means as the investor, you are responsible for communicating your needs with your advisor. When you meet with your advisor for the first time, keep these key responsibilities in mind:
- Be open and honest – Your advisor needs to know about your financial situation, knowledge and experience. They also need you to be clear about your objectives and tolerance for risk in order to make appropriate investment recommendations. Be sure to tell your advisor about any big changes in your life, so they can make any necessary adjustments to your investments or financial plan.
- Understand what you’re investing in –Read the reports you get from your advisor or firm, so you’re aware of what’s happening with your money. Have a clear sense of your investment strategy, and if you have questions, talk to your advisor. Be aware of what’s happening in financial markets, so you can understand how your investments might be affected. Learn more about how to research your investments.
- Ask questions –If you have questions about your investments or their performance, ask your advisor. A good advisor will want you to be informed and will welcome your input. When your advisor recommends an investment, keep these questions in mind:
- How does this investment work?
- Why should you buy it?
- How will it help your reach your goals?
- What is the level of risk?
- What are the costs to buy, hold and sell the investment?
- When can you sell your investment?
- Will you pay fees or penalties if you need to get your money out sooner?
Working with an advisor is a relationship. If the relationship is working well, that means you should feel comfortable talking about your financial needs and concerns. If that’s not the case, then this may be a sign to look for a different advisor who does meet your needs.
If you’re new to investing or to working with a financial professional in general, take a moment to familiarize yourself with the types of investments available. Also consider whether you prefer an active or passive approach to investing, and what kind of time horizon you expect for your investments.
Summary
A financial advisor can help you reach your financial goals. They can provide specialized advice and support. If you’re considering working with an advisor, you should know that:
- The type of advisor you work with depends on the type of advice you need and the financial products and services they offer.
- Your advisor will collect your personal and financial information, and ask about your investment experience, goals and overall financial situation.
- Your advisor should be clear about products and services they offer. They should discuss fees, how they are paid and explain the risks and returns of their recommendations. They should also recommend investments suitable for your situation.
- You should receive regular account statements about your portfolio’s progress.
- Your advisor cannot guarantee the market will perform in a specific way, achieve unrealistic expectations, always recommend profitable products, or buy or sell investments without clear instructions from you.
- As the investor, your responsibilities include being open and honest with your advisor, understanding what you’re investing in, and asking questions.
