Not all experts have your best interests in mind
There are those of us who are all thumbs when it comes to investing in an RRSP. Bombarded with jargon such as “rate of return,” and “term deposits,” it’s all too easy to get scared off from making that financial commitment or devising a future strategy. A recent report by TD Canada Trust says less than 14 per cent of Canadians have a retirement plan.
But if you’re the type who can’t tell a HBP (Home Buyers Plan) from a LLP (Lifelong Learning Plan), how do you know you can trust the person you turn to for aid? There are legions of experts and advisers who want to lend a hand for a fee, but not all have your best interests in mind.
“Get an adviser who is genuinely interested in your RRSP investments. I can tell you there are many out there who are just looking to fill a quota,” says Gail Vaz Oxlade, host of Slice TV’s Til Debt Do Us Part. “You want one who calls and updates you on your portfolio’s progress regularly. You don’t want one who takes your money, never contacts you and then says, ‘Well, I warned you,’ after your RRSP isn’t doing as well as you’d expect.”
And here’s what you should expect from a good RRSP adviser at the very least, according to Ottawa-based financial adviser Robert Abboud: Someone who will take time to hash out a retirement projection plan for you. While a financial plan that will likely span more than 50 years can’t be construed as perfectly accurate, Abboud notes advisers can give investors something to work within the short term.
“I’ve been in this business for 16 years, and I’ve hardly ever seen a client who has a retirement projection,” says Abboud. “It takes all of 20 minutes. This is the bare minimum, and not all advisers are doing it. How would you ever know how well you’re doing if you didn’t have a plan?”
Preet Banerjee, a financial adviser at ScotiaMcLeod, says accountability in an expert is all-important, and there are ways of finding out if your adviser is on the up-and-up. Referral checking is one: Who has the adviser worked with before? What does the investor say about their work? Samples are other indicators of how well your adviser can do for you.
“Don’t just blindly give someone your money,” says Banerjee. “It never hurts to get a second opinion.”
It also helps, and is in fact necessary, to do a little bit of digging on your own; it’s your money after all, and you’ll want to be able to tell if an adviser is just paying you lip service. Banerjee recommends listening to widely recognized figures in finance, and taking courses on how to invest to better educate yourself. A little knowledge can go far when drafting that final retirement plan.
“Do some work yourself. There’s no quick fix,” notes Banerjee. “You don’t have to like it, but you do have to do it. Some investors will even have, for example, a five-year relationship with an adviser, during which time they learn enough about it to eventually do it themselves.”