The most unhelpful thing you can tell someone who is frustrated about not being able to find an investment adviser is how easy do-it-yourself investing is.
Just buy bank and other dividend stocks. Just buy asset allocation exchange-traded funds. Just buy shares of the companies you know and respect. I have heard DIYers say stuff like this over and over through the years and my response is always the same. Great for you – maybe – but some people need and or want an expert to manage their investments.
The challenge for people who want to work with an adviser is two-fold - finding someone who is qualified and sympatico with you, and then getting this person interested in your business. The advice business is endlessly quoting studies telling us how much better off its clients are, yet many advisers are only interested in higher net worth clients.
How does someone with a modest size account, let’s say in the lower six-figure range or less, interest an adviser? Here are some thoughts from Wade Kozak, senior portfolio manager and investment adviser at Kozak Financial Group in Calgary.
One is to use an adviser working with your children or your parents: “Advisors who have minimums are usually very happy to work with the parents or children of existing clients to help build a fence around the household, regardless of the account size,” Mr. Kozak wrote in an e-mail.
If you work with your parents’ adviser, you’ll be able to ensure they are well-served and not being taken advantage of. Working with your children’s adviser might give you comfort that your affairs will be well looked after if you’re ill or your mental capacity declines.
Another suggestion from Mr. Kozak is to ask this of an adviser you would deal with, except you don’t have the assets: Can you suggest another adviser who would be open to working with me? “Often the more established adviser has less established colleagues or contacts who would be happy to have you as a client,” Mr. Kozak wrote. “The less established adviser often feels an obligation to do a good job due to their relationship.”
-- Rob Carrick, personal finance columnist
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Stocks to ponder
Very Good Food Co. Inc. (VERY-X) Investors in this plant-based product maker are hoping big market losses are behind them as the company plots a major expansion into more grocery stores across Canada and the United States. The stock’s current price is a fraction of the record $9.50 it reached a year ago. And this week, its chief financial officer left. But does its expansion and more reasonable valuation mark the start of a new uptrend for the stock? Brenda Bouw takes a look.
The Rundown
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Stagflation at hand? Inflation, check. Stagnant growth not so much
The rise of a new coronavirus variant has raised fears among investors of a double-barreled hit to the U.S. economy of slowing growth and still-high inflation as supply chains stutter, local governments consider new restrictions and consumers assess the health risks of everything from dining out and traveling to returning to work. But economists so far see the risk of “stagflation” - that toxic blend of weak growth and strong inflation so feared by policymakers - as only half-baked. Prices are rising, in the United States more notably than elsewhere, and the pace has proved more persistent than policymakers anticipated. Growth, though, is far from stagnating, and seems on track to continue next year at an above-average pace that could push the United States to full employment in a matter of months. Howard Schneider of Reuters reports.
Dark cloud of tighter U.S. financial conditions hangs over emerging markets
If the consensus view of a strong greenback and higher U.S. bond yields in 2022 proves accurate, emerging markets are in for a rough ride, particularly in the first half of next year. Jamie McGeever of Reuters looks at what may lie ahead.
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Ask Globe Investor
Question: I was thinking about purchasing Algonquin Power & Utilities Corp. (AQN) but discovered its dividends are paid in U.S. dollars. I once received U.S. tax forms for limited partnership units that paid distributions in U.S. currency and I don’t want to go through that again. Are there any U.S. tax implications for Algonquin investors that I should be aware of?
Answer: No. Algonquin is not a limited partnership but a Canadian-based corporation that declares dividends in U.S. dollars. The utility operator and renewable power generator switched to paying in U.S. currency several years ago to reflect the growing contribution of its U.S. operations, but its dividends still qualify for the Canadian dividend tax credit. The same is true of other companies – such as Magna International Inc. (MG), Barrick Gold Corp. (ABX) and Restaurant Brands International Inc. (QSR) – that are based in Canada but declare dividends in U.S. dollars.
--John Heinzl
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Compiled by Globe Investor Staff