Since the downturn, I’ve been fielding a lot of angry calls from disgruntled investors. I am reminded of the movie, “Network”, which I saw again recently. In the film Albert Finney has everyone watching his TV show rushing to their windows to yell, “I’m mad as hell and I’m not going to take it anymore.” I suspect a lot of us feel like shouting from the rooftops with him.

But the problem is that nobody quite knows who to blame for the mess and where to turn for solutions. Some are angry at governments for not regulating the financial industry more. Many are thinking of changing advisors or are trying to find new investment vehicles.  Some are blaming themselves for not asking more questions or making different decisions before the market meltdown.  The question is, what do you do now and who do you turn to for help?

Set Realistic Expectations

If you stay with your current advisor or switch to a new one, make sure you have reasonable expectations. Advisors aren’t fortune tellers. Most in the mutual fund industry advocate a buy and hold strategy, because, historically, this approach has worked better than trying to time the markets. What you can and should expect from any advisor is help in creating a customized investment plan, transparent disclosure of fees, and easy to understand reporting of your returns. Keep in mind that most investment advisors work on commission or earn a percentage of what you invest, so their services are not “free”. Make sure you understand exactly what services they provide for their fees and what their potential biases might be.

Using a “Fee-Only” Financial Planner for your Financial Plan

If you don’t want to invest on your own, an investment advisor can help you buy and sell stocks, bonds, mutual funds and other investments.  But if you want help with your financial plan, you are better off using the services of the small but growing number of “fee-only” or “fee-for-service” financial planners across Canada.

“Fee-only” financial planners should be able to advise you on all aspects of your financial life, not just investments. They can help you with setting financial and life goals; developing a personal net worth statement; real estate decisions; retirement and estate planning; household budgeting; debt reduction; coping with life transitions such as divorce or the death of a spouse. The best of these services will also place a strong emphasis on personal financial education so that you are better informed, more confident and in control of your financial affairs.

“Fee-only” planners charge a fee for their advice and services, just as an accountant or lawyer would do, typically $150-$300/hour, or on a project basis.  Ask them the same tough questions you would ask any other financial advisor. Make sure they disclose whether or not they sell any products.  (Some do even though they call themselves ‘fee-only’.) You can find a list of “fee-only” financial planners at www.moneysense.ca.

Karin Mizgala

Karin Mizgala is a Vancouver-based fee-for-service financial planner with an MBA and a degree in psychology. She’s the co-founder of the Women’s Financial Learning Centre.