Investment Products
Describe your process for selecting securities to purchase for my portfolio?
• What qualitative factors do you consider?
• What quantitative factors do you consider?
• What are your “buy side” criteria?
• What are your “sell side” criteria?
• Who does your product research? What are their credentials?
• How often do you review the products for continued quality?
• How many trades will we see in a year?
• Do you offer a discretionary or non-discretionary investment service?
• Do you offer products from many companies or just your own? (Many choices provide better objectivity)
• Do you like to sell IPO products to clients?
Investment Advisory Process
• Do you follow a professional process for portfolio construction? Describe your process.
• Do you address my goals (or do you just buy products randomly?)
• How do you invest given my age, income, risk tolerance and tax bracket?
• Describe in detail how you manage risk in fixed income and how you manage risk in the stock market.
• Do you educate me on what is in my account? (vs. just selling & telling)
• Much of my money is taxable. What strategies do you implement to control taxes?
• How often will we meet for a face to face review meeting?
• Will I get meaningful investment reports that show rates of return and benchmark comparatives?
• Will I get written personalized analysis of my results for each calendar year?
Fees
• What investment advisory fees will I incur?
• What product commissions will I incur?
• What embedded product costs will I incur?
• How much of my fees will be tax deductible?
• Will you provide fee and commission education and options and let me decide how I want to pay?
• Do you sell products that have no commissions?
• Do you sell F series mutual funds (versions with lower costs and no embedded commissions)?
• Will you avoid specialty products like labour funds, tax shelters, flow throughs, split share products, income trusts, sector products, proprietary products, wrap programs and other unique
products that can be complicated, expensive and dangerous?
• Do you charge extra for financial planning? How much?
• What miscellaneous or occasional account, client or transactions fees will I have to pay?
• Do you provide written disclosure of all compensation you earn from me (so I can judge value and fairness)?
• Do you provide or accept any compensation to / from third parties as a result of our relationship? (e.g. an accountant)
Financial Planning
• In retirement, will you review my cash flows (considering CPP, OAS, pensions, RRIFs, business income and all other income sources to design a cash flow stream, after tax, that meets my needs? Will you constantly review this level of income for appropriateness?
• In retirement, will you consult on whether to take money from my registered accounts vs. non registered accounts for an optimal after-tax result?
• Will you review my taxes and notice of assessment each year to examine for tax planning opportunities and make sure my portfolio taxation is minimized?
• Will you advise on estate planning, Will construction, the use of trusts today and will you assist with estate management after I am gone?
• What other financial planning services do you provide at no extra charge?
• Before I retire, will you regularly calculate my progress towards retirement, establish targets for me to save, benchmark my progress and equate my plan to how we invest?
• Will you provide advice on strategies related to mortgages and other forms of debt so that we can determine the best way to be debt free?
• Will you assist with strategies for children’s savings, including advice on RESPs, in trust accounts and formal trusts?
• Will you provide advice on buying real estate, selling real estate, downsizing in retirement, cottages, rental properties and generally recognize real estate may be the largest purchase of my life?
• Will you provide advice on my career finances, including guidance on pension choices, health insurance, company stock and stock options and what to do with bonuses?
• Will you help me to evaluate the best strategic use of my money between spending, saving, paying down debts, buying insurance and other uses of my money?
• Will you help me to assess my needs for life insurance, disability insurance and critical care insurance?
• What kind of report will I get summarizing this financial planning advice? Did you write it all or did a software tool produce a templated report?
Service
• Who will my relationship be with? Will that change?
• Who are the people that will work on my file? What are their credentials?
• How often can I expect to see you in person each year?
• How often can I expect to get a phone call from you?
• How often do your employees change (e.g. do you have high turnover indicating problems in your organization)?
• Do I get voicemail when I call you or real people?
• Will you return calls same day?
• Do you have 10 clients I can randomly sample and speak to about the quality of your service and their view of value?
• How many clients have you lost in the last three years? Why did they leave?
• How many clients do you have? (more than 500 is too many to service)
• What have clients complained to you about in the past? (you may also want to do a google search on their names and check the provincial securities website for published complaints)
• Will you meet me in my home or do I have to come to your office? Is parking free?
Qualifications & Licensing
• What is your educational background that qualifies you to do this work?
• How many years of relevant experience do you have working with clients like me?
• What do the designations mean on your business card?
• How big is your firm?
• How is my money deposited and protected?
• What insurance do I have on my accounts and on the products you purchase for me?
• When was your last audit by the provincial securities regulator? What was the result?
• When was your last audit by the national self regulatory body (MFDA or IIROC) and what was the result?
• Can I see your certificate showing up to date errors and omissions liability insurance?
• What annual training and development do you do to continue to stay on top of your profession?
• What level of licensing do you have for investments? (Portfolio manager, registered rep, mutual fund agent, insurance agent or other? Why do you have the licensing that you have vs. the others? What are the differences?)
• I would like to meet your Branch Manager and understand how they will supervise your work on my accounts.
That Little Bit Extra
• In a country of thousands of advisors, why you?
