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> questions to ask before you invest

Purchases and sellers of financial products and services have definite responsibilities.  Remember, your potential advisor has prepared before meeting you.  You should also be prepared before making the important decision to invest.  To assist you in the decision-making process, the following is a list of questions that you should ask when interviewing a potential or current financial professional.

 

  • What are the credentials, education and training of the advisor and the support team?  What experience do they have in the financial industry?  Have you met the support team?  Who will look after your account on a daily basis - the advisor, an assistant or other?  Who is the alternate contact to your advisor?

 

  • Is the advisor free to shop the market for investments, or is he/she limited to the products of one company?  What products is the advisor licensed to sell (i.e. mutual funds, life insurance products, securities, a combination?)

 

  • Ask if you may show his/her recommendations to other advisors (lawyers, accountants, etc.).  Will you be provided with a written report outlining recommendations?

 

  • What has the advisors track record been?  How did he/she respond on behalf of clients during volatile markets in the past?  Can you contact a couple of clients for feedback and testimonials?

 

  • How is the advisor compensated?  What are his/her fees?  What commissions, fees or hidden fees are associated with the investments that he/she offers (i.e. front or back load mutual funds, MER's, etc.)  If you leave your advisor or your investment, what fees will be incurred?

 

  • Are there any guarantees associated with the investments recommended?  Will any guarantees be provided for in writing?

 

  • How often will the financial institution provide reports on your investments?  How often will the advisor contact you for a review?

 

  • What are the responsibilities of the advisor in the proposed relationship?  (i.e. full disclosure of facts, fees, etc.).  What are yours as a purchaser?

 

  • Is your need and risk profile discussed first, and then the products, or vice-versa?  Are products only recommended after your situation has be carefully assessed?

 

Note:  Kelley Keehn has been in the investment industry for over a decade.  Since merging her financial planning practice in the summer of 2005, she no longer holds any licence(s) to sell securities of any kind, nor provides advice giving, nor recommends or endorses any financial product.  Please consult your financial, tax or legal council for investment advice.