Some people think they can turn everything over to an adviser, sit back, and watch the money pour in. That's not how it works. Every investor has responsibilities.
What are my responsibilities as an investor?
- Clearly tell your adviser what to do. Advisers can't act on vague orders like, 'Sell when the time is right,' or 'Sell sometime soon.' Say 'Sell when it reaches $20,' instead. Also, talk openly and be honest. Don't leave anything out.
- Educate yourself. Read every report you get from your adviser. Follow the business news. Ask your adviser about anything you don't understand.
- Be realistic about what you'll make. Most stock market investments go up and down in value. Your adviser can't work miracles.
If you want your adviser to get great results, some of it's up to you. Use this checklist to make sure you're doing what a good client should do.
Are you a good client? A quiz
- I talk openly and clearly with my adviser. I make sure they understand my situation, my goals, and what I know about investing. I don't leave out information that I might find embarrassing, like having debt or needing money.
- Unless I have agreed that my adviser will take care of everything for me, I research and track my investments. I ask questions and try to learn more about investing.
- I am realistic about how much I'll make.
- I know that when I invest money, there's often a chance I could lose some or all of it.
- I read any papers or reports my adviser gives me about my investments.
- I keep good records of my investments. I read and keep confirmation slips and account statements. I also take notes whenever I talk to my adviser and save e-mails we have exchanged.
- I tell my adviser right away if there are mistakes or problems with my account.
- I take steps to protect my personal information.
- I know that, after I talk it over with my adviser, I'm the one who must decide to buy or sell investments.
- I ask questions about anything I do not understand.
Remember: Be involved
In the end, you're responsible for any decisions you make with your adviser, so do your homework! After all, it's your money. No one else will care as much about it as you do.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.