Skip to main content

Rose and David Silva meet with financial adviser David Cooke.

Dream of a prosperous post-work lifestyle, but don't want to pay someone a fee to manage your money? Then be prepared to do a lot of homework over many decades to make all the right moves.

With so much on the line, many Canadians turn instead to financial advisers for expert help. But how to choose the right one?

For starters, make sure you see yourself as the boss and that your adviser will take your instructions and objectives seriously, says David Cooke, a financial adviser with Qualified Financial Services in Toronto.

"The approach clients have to take is that they are a company hiring an employee," Mr. Cooke said. "References and qualifications are important, too, but you have to be comfortable with the adviser."

It's also crucial that clients get together with their adviser regularly to go through every aspect of the plan they devised and make adjustments if necessary, Mr. Cooke says.

In the aftermath of the epic global financial meltdown of 2008, people are paying more attention to their long-term goals and demanding more information and strategic options from their financial advisers.

For Susan DiPietro, prospective clients should expect a financial adviser to devise a plan that is right for them specifically.

"The first thing I ask [a prospective client] is: What's important to you about your money?" said Ms. DiPietro, an independent financial adviser in Newmarket, Ont., for the past 15 years.

"They could say retirement in 40 years, or buying a car in three years, but it is very important to establish the right time frame."

Ms. DiPietro likes to spend time educating prospective clients up front. "Nobody signs a [client-adviser agreement] on their first visit," she said.

David and Rose Silva are at a crucial stage in the growth and management of their financial portfolio. They are in their early 50s with two children, aged 14 and 10. The Silvas have been working with Mr. Cooke as their financial adviser for the past five years, after switching over from another adviser.

"The key is that [Mr. Cooke] is very easy to talk to. You have to leave it in the hands of people who you trust and think of it as a long-term arrangement," said Mr. Silva, who is vice-president of Sutton Reinsurance Underwriters Ltd.

A critical element in a relationship with any financial adviser is to make sure you meet regularly. Mr. Silva says he aims to meet quarterly with Mr. Cooke to go over the performance of the portfolio.

The Silvas sought out a new adviser as they began to think more seriously about financial security once they were ready to leave the working world.

"Our goals were pretty simple, really," Mr. Silva said. "A comfortable retirement and something to leave for the kids when the time comes."

Mr. Silva and Mr. Cooke first met as professional colleagues in the insurance business, where Mr. Cooke worked as a broker before also becoming a financial adviser 12 years ago.

"At first, we had David look at my insurance portfolio. From there, it was a gradual transition to the rest of the portfolio," Mr. Silva said. "The performance in the markets, because it's so volatile recently, I'm not too concerned about it. [Mr. Cooke] has also assured me what the plan is: where we should be looking to when thinking about our overall five- to 10-year time horizon."

It's a good idea to meet with your financial adviser at least twice a year. Another important factor to ensure a successful partnership with your adviser is to make sure your investment philosophies are the same, according to Ms. DiPietro.

To establish a good foundation in the beginning of the relationship, a good financial adviser will create a risk profile for a prospective client based on their age, family situation, employment, debt and asset levels, existing portfolio and how much they are willing to set aside to build up a portfolio. Then the adviser and the client will establish a time frame for when the portfolio needs to mature to achieve the client's goals.

Most portfolio investments in which the client is more than 15 years away from retirement are graded for medium risk, with some room for growth stocks. A client who is closer to retirement would likely have a low-risk portfolio with elements that generate investment income such as dividends.

But financial advisers must also manage a client's expectations, and the best way to do that is to meet regularly and constantly assess how the plan is working.

"I'm conservative by nature and come from an Irish-Scottish background, so I'm very straightforward," Ms. DiPietro said. "I tell people up front that a rate of return is not guaranteed."

If a client wants to invest in high-risk venture funds, Ms. DiPietro is happy to let them do it, with one caveat: They set up a trading account at their bank and do it on their own.

Interact with The Globe