Although the concept of outsourcing has become widespread, dividing labour and specializing is far from new! It was the development of agrarian practices approximately 10,000 years ago that got the wheels turning. For the first time in history, people could grow more food than they needed for themselves and their clan. This allowed communities to grow in size, which provided more opportunities to specialize through economies of scale.
As the centuries marched on, a pronounced surge in technological evolution was seen post-Middle Ages. Things really kicked into gear during the Industrial Revolution, after which stark differences in progress took periods of 75, 50, then 25 years at a time. In today’s modern world, these periods have shrunk down to as little time as one to five years.
If harnessed correctly, outsourcing can allow us to get more out of our lives by allowing us to minimize the tasks we don’t enjoy and/or are poor at executing.
So, what does this have to do with getting financially organized? The last six posts have provided detailed and doable steps to get your finances fully organized like they’ve never been before. Let’s be honest though, many of you are thinking, “That’s nice, but there’s no way I’ll have the time, get the knowledge or make the effort to do all of this!”
If this is you, you’re basically left with two options. The first — and sadly what most people do — is do nothing and hope everything works out. The second and more proactive approach is to outsource — work with a professional who can walk you through these steps.
If this is your preferred approach, below is a fairly comprehensive list of what you should look for in a wealth manager.
As with every relationship in your life, it’s important that you like the person you’re working with. Your advisor doesn’t need to be your best friend, but it helps if you feel comfortable picking up the phone to talk instead of dreading your next meeting.
Someone who cares
If you get the impression that an advisor is only interested in the money he or she will make off of you, I’d say they probably aren’t the best fit. One of the most important parts of why he does what he does should be because he enjoys helping people reach the goals that are important to them.
The biggest issue I hear from unhappy investors looking to change advisors is poor service. Investors complain about rarely hearing from their advisor, or when they do, it’s to ask for more money. Others feel their advisor doesn’t have a proactive mindset or plan for their investments or future.
Great service means different things to different people. If you want to meet with your advisor twice a year; have a comprehensive financial plan based on your goals; and have emails or phone calls returned within 24 hours, then find an advisor you know will provide this for you.
It’s important that the professionals have the right training to help you achieve your goals. In my case, I’m a CIMA (Certified Investment Management Analyst) and there are less than 200 of us in Canada. The education I received attending the Wharton School was invaluable. However — much like the brilliant professor many of us had in university — if the person doesn’t have good communication skills and doesn’t care about doing a good job, the letters after their name don’t mean much!
The company your advisor works for is important because it needs to provide the advisor with the following: strong resources, the freedom to do their job in the best possible manner, the ability to access a wide array of investment products and not dictate what those products should be, and the financial strength to stay the course when markets and economic conditions become turbulent.
Fees are often the “elephant in the room” when investors and advisors first meet. Sometimes advisors are not comfortable bringing them up, while investors wonder how much the described service will cost them. Fees vary from advisor to advisor depending on services provided and the level of service. One thing that shouldn’t vary is the upfront agreement on how much will be charged and a way for clients to track these fees.
The advisor you work with must have a sound investment philosophy that works not only in good times, but also in challenging ones. Their approach must also work in sync with your risk tolerance and financial goals.
Your money needs to work for you. This doesn’t only mean to grow in size, but also to help you achieve your goals! It is imperative that your advisor gives you the opportunity to plan your finances around what is important to you. This of course includes developing the best strategies to help minimize the taxes you pay!
I hope you found this seven-part series on getting financially organized helpful. This is the one area I feel is essential to have taken care of.
If you have any questions regarding any part of this series, feel free to contact me by email or my direct line (416-777-6368). I would be more than happy to help you with any questions you may have.