You have questions, investment advisers have answers.
So how come you don't have an adviser?
Maybe you're skeptical, and with some justification, about whether advisers advise or just sell mutual funds. Or, maybe you simply don't know how to find a good adviser. I know that's an issue because one of the more common questions I get from readers is whether I can recommend a good adviser.
What I recommend is that people check out some of the new services for matching investors and advisers, including the just-launched website Accretive Advisor. Since the Internet came into wide use more than a decade ago, one its best applications has been empowering do-it-yourself investors. Accretive Advisor does something similar for people who prefer to have an adviser.
Accretive Advisor introduced a service Monday that guides people through the process of deciding what kind of financial advice they need, and then helps match them up with three to five suitable advisers who have paid to have their names listed (or, their firms may have paid).
One of the most troubling things about investment advice is how it's so often a conduit for selling financial products. Accretive Advisor isn't selling anything to investors. There are no ads on the sight, and there's no mention of investment products.
"The site is designed to be a safe harbour for investors," said Randy Ambrosie, founder and chief executive officer of Accretive Advisor and a mutual fund industry veteran. "They have to feel like we're not pitching stuff at them."
Mr. Ambrosie said his new venture will help investors better understand the advice world and, in doing so, raise their expectations about what advisers can do for them.
If so, then you can make an argument that Accretive Advisor represents a potential free-market way of addressing the issue of how to ensure people receive ethical, professional-grade financial advice. Regulators around the globe are addressing the matter, but we haven't seen much from the advisory world itself.
There are actually two levels of adviser listing on the Accretive site, one of them a basic level and the other an elite status that advisers must earn through a favourable client satisfaction audit conducted by Accretive itself. Elite advisers must also have a clean long-term record with regulators. Background checks for other advisers will have been performed by the compliance departments at their own firms.
Ideally, Accretive Advisor will give investors a better quality pool from which to find advisers. Until regulators get around to enforcing a clients-come-first culture (technically, a fiduciary standard), this website is worth a try if you're in the market for an adviser and don't feel confident about what to look for.
There are already a few different online options for matching investor and advisers, some of them provided by professional associations and designation. These sites are mainly good for getting a list of advisers in your area, with only spotty information on their specialties and other details.
Another approach has been taken by Know Your Financial Advisor (KYFA), a website that offers what it describes as Canada's largest database of financial advisers, with more than 80,000 listings. Some advisers have provided detailed profiles of themselves, and the site is also set up to allow clients to review their adviser. That's an intriguing idea, by the way. It's done for doctors, why not advisers?
Another client-adviser matching service, this one done face to face, is offered by the Toronto-based firm Weigh House Investor Services. They charge $125 to attend a workshop on what to look for in an adviser and then hear presentations from three different advisers who have been vetted by Weigh House and agreed to charge lower-than-normal fees.
If a client chooses to proceed with an adviser, the next step is to pay $750 for a Weigh House financial plan that can be used to guide future investing strategy.
Warren MacKenzie, CEO of Weigh House, dismisses the standard advice on finding an adviser, which is to ask for referrals from family, colleagues and friends. "In most cases the friend's recommendation is based on how nice the person is - not how good a job is being done," he wrote in an e-mail.
This brings us back to the matching services offered by Accretive Advisor, KYFA and Weigh House. If you need an adviser, or you're one of the 5 per cent of clients who change advisers very year, I recommend you give them a try.
Five adviser sources
A website that helps investors decide what kind of adviser they want and then gives them the names of three to five suitable advisers to contact.
A searchable online directory of advisers
3. The Weigh House Investor Services adviser
Pay $125 to attend a seminar on choosing an adviser and hear search workshop (weighhouse.com) presentations from preselected advisers
4. Financial Planning Standards Council
Find a certified financial planner (CFP) near you
Advocis is an organization of advisers working in the insurance area