A good investment adviser is like a good doctor. She’ll take a broad, long-term look at your financial situation and offer a plan to keep you fiscally healthy, even if the marketplace gets sick. Experts say investing without advice can be like diagnosing yourself online: Risky.
Terry McCullough spent 10 years working as a financial/investment adviser (the titles are often used interchangeably) and now teaches investment courses at Ontario’s George Brown College.
“Financial advisers do really pay (off) for people — if they do their homework. It’s a marriage,” he says. “Advisers come in all shapes, sizes and flavours. Even a great adviser is not always good for a specific client.”
McCullough says advisers bring balance. Do you want to buy a house in two years? Have kids in four years?
“They can say, here’s what we can look for in the way of a return, here’s what we expect to see to happen to you now, and here’s what your needs will be in different time frames,” he says.
They can provide a disinterested take on the markets and your money, balancing risk with reward.
“In the last year, if somebody had had a balanced portfolio and equity markets corrected drastically, but bond markets made a bit of money ... we could adjust your 50-50 portfolio at that point. Sell some of the bonds, buy some of the equities at a lower price,” he explains.
Scott McCartney, senior investment adviser with Canaccord Wealth Management, says there’s lots of free advice, but you’ll get what you pay for. People don’t have the time to deal minutely with their money, so they hire him. His clients call him with tips they’ve heard at the pub and it’s his job to check them out in the real world.
“Most of what I do is I’m simply a guide,” he says from his Edmonton office. “As a guide, I can bring to the table institutional-type investments that people can’t get on their own.”
Online investing can make it too easy to make a bad decision with your finances, he says. If all you have to do is point and click to change your RRSP from a value strategy to a speculative strategy, it’s “good to have somebody on the other end of the phone to say you might want to consider this or that — two heads are better than one.”