Trusted advice

We talk a lot about relationships

Whether they’re romantic, plutonic, business focused, educational, or political, the state of our world is usually a reflection of the state of our relationships. 

When we’re getting along with the people who are important to us, life is usually pretty good. When we’re struggling with people, we get stressed. Depending on the nature of the relationship, our emotions can run from mildly annoyed to deep anger. 

It’s no wonder that your emotions can run high when things aren’t working out with the people you depend on to help manage your financial affairs. 

To some it’s simply business, but to many people, money and finances are emotional subjects. Whether it is reflective of past experiences or current situations, we all have certain beliefs surrounding money.

Volatility brings change

When the markets turn negative and your monthly statement keeps falling, it gets harder to remain faithful to the program you first bought into, and the person who introduced you to it. 

Volatility brings change, and bad markets will inevitably deliver change. Whether it’s with your accountant, your financial advisor or your banker, when the economy and markets start to look a bit like a roller coaster, the result is often roster changes. 

When one of your advisors leaves, it should be a moment for reflection and an opportunity to take stock and evaluate the past. Measure what was delivered, and what was swept under the rug. 

It’s about trust 

The key to this process is to remember that you are paying for a service. Yes, in terms of the investment business you are also paying for performance, but it’s more than just the money; it’s about trust. 

Do you feel comfortable with your advisor? Have you built a strong relationship, or is it something you could take or leave? Where do your loyalties lie, with the institution or with the advisor? Who have you been with the longest? Who has had the biggest impact on your life, and that of your family?

Are there greener pastures somewhere else or would you just be trading places? 

In the financial services world, trust is sometimes an overplayed card. It isn’t this thing you can buy or sell, it’s something that needs to be built. It’s a result of time, dependability, consistency and perspective. 

The only way someone can become your trusted financial advisor is if you trust them, and that takes more than a good marketing campaign. 

It’s about knowledge

Does your advisor know what they’re talking about? Do they take the time to help you understand the details? Do they deliver on their promises? Are there a lot of errors and mistakes or are they consistently on? 

Do they have their own opinions about the direction of markets, economies or interest rates? Are those opinions consistent with yours? Do they “get you?” 

We all have our own way of looking at the world, and most times the people who see the world the same way we do are the ones we are drawn to. That doesn’t mean we need to agree that there’s land ahead, we just need to be looking through the same spyglass. 

Performance is important

As much as I believe that it’s more than just about the money, good long term track records go a long way to enhancing a relationship. 

Some advisors rely on other managers for their returns, some collaborate with their clients to make decisions, and others make all the investment decisions on behalf of their clients. 

Each has merits and detriments, but at the end of the day, whichever method they choose needs to produce results. These results, when combined with the other factors, should add up to an easy decision. 

If you find yourself struggling over your choice, it may just mean that you haven’t found the right person yet.

It’s your money

When it comes to money, my advice to clients is this: Always remember that it’s your money, and that ultimately you will have to live with the choices you make. 

Choose wisely, take your time and remember Benjamin Franklin’s words, “An ounce of prevention is worth a pound of cure.”

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Jeff Stathopulos, CIM, CFP, Portfolio Manager

Jeff is an advisor and partner with The Navigation Team at Scotia Wealth Management.

He lives in Kelowna with his wife Tanya, their two university bound daughters and their canine kids.

You can contact Jeff by email at [email protected]

Website:  www.yourlifeyourplan.ca

The Navigation Team

Scotia Wealth Management

This column is for information purposes only. It is recommended that individuals consult with their financial advisor before acting on any information contained in this article. The opinions stated are those of the author and not necessarily those of Scotia Capital Inc. or The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member Canadian Investor Protection Fund.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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