What to know when shopping for financial advice in a sea of titles and credentials

By David Hodges

THE CANADIAN PRESS

TORONTO _ Choosing a financial adviser is a big decision, yet few investors realize that in most provinces there’s a lack of specific, harmonized regulation of professionals who provide that type of service.

An expert panel set up by the Ontario government has made several recommendations to deal with major concerns, including the myriad of confusing titles and credentials and the lack of an explicit obligation to act in a client’s best interest.

However, that hasn’t stopped investors from increasingly relying on financial advisory services.

A 2016 study by the Canadian Securities Administrators found that 56 per cent of respondents were working with an adviser, up from 43 per cent a decade earlier.

For those considering working with an adviser, experts recommend taking these steps before making a choice:

Check registration

Marian Passmore, director of policy for investor advocacy group FAIR Canada, says securities regulators will only register firms and individuals if they are properly qualified. So check an adviser’s registrations.

“A lot of people don’t do that,” Passmore says. “If they had done so, they may have not lost their money.”

A good place to start, says Passmore, is the CSA’s AreTheyRegistered.ca site, which allows you to search for any licensed investment adviser. Keep in mind, however, that insurance and financial planners won’t be on that site unless they’re also licensed investment advisers.

The CSA website also allows you to see if your licensed adviser has ever been disciplined for misconduct.

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Ask about products and services offered

Not all advisers offer the same products and services and not all have the same expertise, so it’s important for consumers to understand the differences.

For instance, most investment advisers are licensed by either the Mutual Fund Dealers Association or the Investment Industry Regulatory Organization of Canada. But while most MFDA-licensed advisers deal only in mutual funds, IIROC advisers can also offer other products including stocks and exchange-traded funds.

In the case of financial planning services whether that’s to reduce taxes, save for a big purchase or to retire in comfort there are dozens of designations and investors will likely have a hard time distinguishing between them.

“IIROC has over 30 credentials that people have but that doesn’t really tell you how difficult or onerous those credentials are,” says Passmore.

The certified planner certification is a reputable designation for those who want a combination of sound investment advice and financial planning know-how, says Ken Kivenko, an investor advocate who is also chairman of the Small Investor Protection Association’s advisory committee.

“They can go beyond the straight investing phase,” Kivenko says. “They do holistic plans.”

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Assess the cost of advice

Because advisers can be paid by salary, commission, a flat fee or a combination of methods, it’s important to make sure you understand how your adviser is paid, how much their services will cost, and how this may affect the advice you’re given.

For instance, many advisers are paid a commission for every product they sell, which may influence an adviser to recommend one investment over another, according to the CSA.

But keeping fees and other investment-related costs low has been proven to be one of the best and easiest ways to help your savings grow.

A fund with low fees, such as indexed mutual funds and exchange-traded funds, has an automatic head start over higher-cost rivals for returns and compounded over years the advantage can grow even more powerful.

What women want from financial advisors

What women want from financial advisors

By Paul Lucus | WP

Sometimes statistics speak for themselves – 73 per cent of women are ‘unhappy’ with the financial service industry, while 87 per cent of females looking for a financial advisor say they can’t find one they can connect with.

These are the damning results of a survey by StrategyMarketing.ca pointing to a significant disconnect between what women want and what they are actually being offered from the financial services industry. Even though the industry has earmarked women as a valuable demographic, its efforts to actually retain them seem to be falling short.

So what mistakes are they making and what can they do to put them right? Wealth Professional spoke to Paulette Filion and Judy Paradi, the authors of the report and partners at StrategyMarketing.ca, to find out.

One of the biggest issues, it seems, is that financial advisors see women as a niche market and don’t develop a strong female friendly brand. Even though they may design marketing campaigns to appeal to women they aren’t actually doing the things needed to make them happy. Indeed when part of a couple, men are almost two times as likely to be approached by a financial advisor and the male partner is 58 per cent more likely to be seen as the primary contact.

“Male advisors still seem to have the deep down gut feeling that women are a secondary market – not really interested in finances,” commented Paradi.

“Financial advisors consider couples as one client, not two and that’s not true – they are two distinct people,” continued Filion. “With single female clients, advisors think how they’ve approached other clients in the past is the same for these female clients. It may not be. Women face challenges that male clients don’t face and have different communication styles that may appear to indicate hesitation, risk aversion or lack of trust when, actually, nothing could be further from the truth.”

READ MORE HERE:

7 steps to master your value promise

By Grant Hicks

Grant

You need a clear picture (vision) to complete your value promise to your ideal clients.

Envision that you have already accomplished your most important goal for your business today. How does that make you feel? Act as if it has already been done.  The message is clear, the best advisors spend more time on servicing clients BECAUSE they have invested the time and energy to put their processes in place. The one critical process is putting your value promise in writing and articulating it with confidence.

With major regulatory changes, increasing demands from clients and changing communication with them, clients are looking for measurable value for the advice they receive. How do advisor’s complete it in other parts of the world? The 5 most highly regulated countries from a financial advisor’s perspective are Australia, United Kingdom, South Africa, United States and Canada. Let’s look at seven key strategies based on research on what successful advisor’s implement in providing value to their clients.

  1. Time – Hours planned in working on their business. In a one year time frame – Project 100 – (you need 100 hours to implement change into your business such as updating your value proposition, going fee based or implementing new technologies. It is called project 100 because you will need to spend 2-3 hours per week for one year or 100 hours on building key practice management processes. The first step is to plan them in your calendar each week 2 hours working on your business. Plan the time first. For example every Wednesday from 8-10 or 11am working on the business implementing processes.
  2. Business models -your goals , your clients and your business model . Does your business goals align with your clients? Managing a large financial advisory business is great if it matches your ideal client profile and creates a win-win relationship. When consulting with advisor’s, they have stated they want to build their practice and manage 100-200 million of assets or more. Then they want to slow down and work less. A business model does not work that way. Find a person (coach, consultant, mentor) who can help you build the business model and ideal clientele you want to create.
  3. Client feedback – what clients value , without this all else will be average. According to Business Health Pty Ltd. businesshealth.com.au , ( Business Health, Key Value Drivers US 2013) only 15% of advisors in the United States have a formal feedback processes for their clients.Those advisors that have a formal feedback system earn up to 52% more than advisor’s who do not have a feedback system. A similar study had similar results by the USA FPA Research and Practice Institute study – Future of Practice Management -December 2013. If you want to become a “ideal client focused advisor” then build a formal feedback process into your client reviews.
  4. Ideal client profile – creating a win-win on communication, compensation and expectations. What is your ideal future client profile. Have it detailed and do a case study and put it on your website for the world to see.
  5. Ideal client service capacity –The 60 / 40 principle. More than 60% of your time should be spent seeing ideal clients- very few advisor’s do that because they use the excuse of too much administration and lack of processes. A quick way to find your capacity for your clients is to add up the number of hours you work each year, say 1800 hours. Then find out what percent of time you service clients. Segment the clients into your main groups or segments. Then find out how much time you spend servicing each segment and add it up. The math may reveal some interesting capacity issues.
  6. Document– Put your value proposition in writing and make it a process. Make a list of ALL your services and how you deliver value through those services. The critical part is the documented process that you use with clients to help them solve their problems. The document is not to showcase you, but the clearly outline how you uncover clients problems and how you solve them.
  7. Ongoing services document – Build your client experience document . As a client what do I get for the fee I pay each year? Consider re-engage existing clients with an innovative and detailed review process and adding more value and services. Then build a document to show clients your detailed process for delivering your “value added review service”.

After all, it’s all about your ideal clients. Don’t waste any time. Put this on your to do list this week!

Always check with your compliance office and or branch manager before implementing any marketing idea. The information does not constitute a recommendation for the sale or purchase of any securities or insurance.

Source: Grant Hicks – President and National Director of Practice Management at Advisor Practice Management

Find out why the “Guerrilla Marketing” series has sold over 21 million copies worldwide and is printed in 62 languages. “Guerrilla Marketing” has been proven to work for small business and financial advisory firms from around the world. Learn out how you can apply these time tested secrets and processes to grow your IDEAL business.

Order your copy online TODAY – Amazon – Chapters -Barnes and Noble – Books a Million- Powells and more www.advisorpracticemanagement.com

U.S.A. – Life Insurance Industry Under Investigation

Recently 60 Minutes broadcast a segment on the Life Insurance Industry systematic and systemic practice of avoiding the payment of life insurance death benefits was aired.  The transcript of *Not Paid* can be read of the segment viewed at:

http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

When you take out a life insurance policy, you pay premiums in the expectation that when you die your spouse or your children will receive the benefit. But audits of the nation’s leading insurance companies have uncovered a systematic, industry-wide practice of not paying significant numbers of beneficiaries.

In a little-known series of settlements, 25 of the nation’s biggest life insurance companies have agreed to pay more than 7 and a half billion dollars in back death benefits. However, about 35 insurance companies have not settled and remain under investigation for not paying when the beneficiary is unaware there was a policy, something that is not at all uncommon.

The beneficiary never comes forward because he or she doesn’t know the policy exists.

But the companies know, says Kevin McCarty, the insurance commissioner of Florida, who led the national task force investigating the industry. And the companies don’t pay, he says, unless a beneficiary makes a claim.

Kevin McCarty: And what we found is that companies have actual knowledge in their files that people have died, yet they have neglected to initiate an investigation and pay the claim.

Lesley Stahl: So in other words, life insurance companies are failing to pay out death benefits when they know the person is dead, and they’re claiming they don’t know.

Kevin McCarty: In many cases, that has been exactly what we have found.

Source: For Advisors Only

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