Working with Your Financial Adviser

From The Hoss's Mouth

Working with Your Financial Adviser

You have done all the necessary leg work, conducted the interviews and have selected a financial adviser. The race for financial freedom is on track but far from over. In fact, you have just entered the starting gate. You and your financial adviser must communicate on a frequent basis. Just like the ongoing communication between jockey and horse, you must let each other know if the pace is just right, or you need to proceed a little slower or a little faster.

Before leaving the starting gate, ensure your financial adviser has a complete and thorough understanding of your financial goals, your current financial situation and your tolerance for risk. This will enable him/her to assist you in producing a strategy for your financial future. Your financial adviser should be providing you with specific and clear recommendations, detail the reasons for the recommendations, and identify the strong and weak points and risks involved.

A word of caution: Do not expect your financial adviser to perform miracles. A quarter horse cannot win a route race, nor can a financial adviser foresee how the markets will perform or always select profitable investments. In other words, do not weigh your financial adviser down with unrealistic expectations.

Remember, this is your money being invested. It is imperative that you stay informed. You and your financial adviser should have a clear understanding of how often you should receive progress reports and statements, and develop a schedule for regular meetings to review your plan. He/she should also know how quickly you expect e-mails and phone calls to be answered. Review all statements when you get them. Make sure the information contained therein is consistent with your agreed upon goals and strategies. If they are not, contact your financial adviser and arrange for a meeting.

It would be to your benefit to stay informed on financial matters by reading newspapers, books
magazines, or blogs such as this one. If you have time, enroll in a few courses. If you see something of interest, contact your financial adviser for his/her opinion.

Last but not least, keep your financial adviser updated with any change(s) in your personal or financial situation. A work promotion, a new child, and a change in marital status are a few examples that could impact your financial situation.

That's enough for today. Time to trot back to the barn.

Stay on track,

The Hoss

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Choosing a Financial Adviser

From The Hoss's Mouth

Your financial adviser must fit you as perfectly as a horse shoe fits a horse's hoof. This is essential if you are to win the race for financial freedom.

Your choice of a financial adviser depends on your financial knowledge and investment experience:

Do you need help with your family's financial matters - i.e. retirement planning, setting goals and paying less taxes?

Do you have investment experience? If not, you will want an financial adviser to provide you with assistance in selecting the proper investment product for your needs. If you are an experienced investor, choose an adviser who offers a wide selection of investments and discusses the benefits and shortcomings of each.

The Hoss strongly recommends that you choose a financial adviser who is registered with a securities regulator. This provides you with added protection, as only properly qualified firms and individuals can obtain registration.

In order to come up with a list of potential candidates, The Hoss suggests you speak with co-workers, family, friends or any other person you trust for their recommendations.

In addition, you can locate registered financial advisers from a variety of sources:

• banks

• investment firms

• brokerage firms

• online

You might want to make initial contact by phone. This can save a lot of time by eliminating those financial advisers who are not accepting new clients or are not suited to your basic needs.

Once you have come up with a short list, arrange to meet with each one of them in their office. You wouldn't expect a horse to run a race without a warm-up, nor should you approach an interview of this importance without thorough preparation. Ten questions you should ask your potential financial adviser:

1. What are your qualifications and education?
2. Do you have references?
3. Is your company registered with a securities regulator?
4. Are you personally registered with a securities regulator?
5. How long has your company been in business?
6. How long have you been a financial adviser?
7. What is your area of expertise?
8. What type of investment products do you offer?
9. Will these products help me obtain my goals?
10. How do you get paid?

Do not hesitate to add your own questions to ask your potential financial adviser. (Sidebar: If you would like to add to this list of questions to ask, fill in the comments form below so The Hoss can include them.)

Do not be surprised, in fact you should expect, questions from the potential candidate. S/he should ask you what your goals are, what your investment experience is, and what your risk tolerance is. If these questions are not asked of you, gallop, don't trot, to the next candidate.

While in their office, check out the surroundings, as this will give you some indication as to how they conduct business. Also, take note of how well the financial adviser listens to and responds to your questions. Did you feel completely at ease discussing your financial situation with him/her? If not, again gallop, don't trot to the next candidate.

When you have completed all your interviews, and before making a final selection, contact the securities regulator in your area and confirm the potential candidate and his/her firm are registered and have no record of any disciplinary action.

That's enough for today. This post is more like a route race than a sprint, but it is an important topic.

Stay on track,

The Hoss

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Beginner Investing

From the Hoss's Mouth

Beginner Investing

Investing, in The Hoss's opinion, should not be considered unless or until you have:

• Eliminated debt or the debt you have is classified as good debt
  

• You and your family have established financial priorities

• Have set up a budget which provides funds for investing

Remember that old cliché: Don’t put the cart before the horse." That is exactly what you would be doing if you start investing before you have successfully completed the above steps.

If you have been reading this blog faithfully, you have already decided what you want to accomplish with your money. Now it's time to refer to your short, intermediate and long term goal lists that you established when setting your financial priorities, and decide on a beginner investing program which will assist you to achieve these financial goals. Increasing your wealth is like building a house; you start with a proper foundation. After the foundation is set, you can expand your investments.

The Hoss understands that the world of investing is indeed complex and foreign to many people. The mere though of comparing stocks, bonds, mutual funds, term deposits and the like can be as difficult as understanding the daily racing form. If you do not understand your investment choices, there are many financial advisors available to assist you with these tough decisions. My next blog will provide information that will aid you in selecting a financial advisor.

You, and/or you and your financial advisor ,will have many things to consider when creating your personal beginner investment plan:

• How much money is available for investing?

• What is your tolerance for risk: high, medium or low?

• Which investment products best suit your risk tolerance level?

• What do you know about the stock markets?

• How familiar are you with mutual funds?

• What asset mix will best achieve your financial goals?

• Will your employment income remain constant or is it subject to change?

• What is your investment time horizon?

The Hoss reminds you that you, and/or you and your financial advisor, must monitor your investment portfolio on a regular basis. When required, make adjustments to keep your portfolio in line with your beginner investment objectives.

Future posts of this blog will contain detailed information on stocks, bonds and mutual funds; what they are and how to purchase them.

Stay on track,

The Hoss

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