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Trusted Tips & Resources

Trusted Regina Financial Experts tip on breaking up with your Financial Advisor - Part 2

Trusted Regina’s Financial experts share a tip on how to break up with your Financial Advisor - PART 2:

If you are looking for compensation, consider contacting the Ombudsman for Banking Services and Investments, a dispute-resolution service for banking services and investment clients. OBSI receives about 8,000 complaints a year and launches 600 to 800 investigations. They will try to facilitate a settlement and if one cannot be reached, they will write a report and make a non-binding recommendation. They can recommend restitution of up to $350,000.

Suitability is the biggest complaint (the next most common complaint is that fees are not properly disclosed), says Tyler Fleming, OBSI’s director of communications.

“Advisors and their firms have an obligation to make sure that the investments that they recommend are consistent with the client’s investment objectives, risk tolerance, financial circumstances,” he says.

“Lets say there’s a young couple who is looking to buy a house in six months and they need their savings in a safe, low-risk product. Their investment advisor puts them in something that is high risk and they lose the money that was meant for their down payment, that might be an instance where we would find it was unsuitable.”

You can take efforts to minimize conflict, he says. Take notes at meetings. Get everything in writing. Keep copies of your documents. Ask questions if you do not understand. Review your account statements. Bring someone with you who understands. Have a regular dialogue with your advisor about your changing goals — this may affect your investment plan.

“Trust your gut. When you have a feeling that something is wrong, don’t be afraid to raise that with your advisor,” Mr. Fleming says.

If things are not working out, you can either just walk away and let your new advisor deal with the transition or send a Dear John letter:

“Thank you for your help in the past. I will be going in another direction. I will no longer be needing your services. I wish you well in your future,” Ms. Waite says. “This is a good lesson in life. This is not personal,” Ms. Waite says. “Send a nice ‘thank you’ note and move on.”

Be aware that you do not have to sell your investments when you fire your advisor. If the advisor has used widely available funds such as Fidelity or Trimark funds, you can move them “in-kind” to another advisor, Ms. Waite says. You may get charged an administration fee.

However, some fund companies such as Primerica and Investors Group sell their own products and an advisor at a different company may not work with them; you can opt to find another advisor within the company.

If you want to leave the fund company, make sure you contact the firm to ask what fees you may pay if you sell your funds; a typical deferred sales charge (a back-end fee that is charged to a mutual fund investor if they redeem their investment prior to a set amount of time) starts at 6% of your initial investment in year one, declining to 0% by year seven.

You can also leave your account as is and move the money when the DSC expires or gets lower; each year, you can take out 10% of the original amount invested without being charged a DSC. Take note, your next mutual funds representative may want you to transfer your funds because she gets a commission, Ms. Waite adds.

“There are often more options than people think there are. Don’t just panic and cash out.”

 


 

 

 

 

Trusted Regina Financial Experts tip on breaking up with your Financial Advisor - Part 1

 Trusted Regina’s Financial experts tip on how to break up with your Financial Advisor - PART 1:


Barry Choi was walking through an underground path in downtown Toronto one winter when he ran into his former financial advisor. 

“Hey, how are you doing?” Mr. Choi said to him. Their relationship had not worked out; but Mr. Choi wanted to be civil, and at first, it was. 

Then his former advisor said, “Just so you know, you ruined my life.” 

“I don’t know what you’re talking about,” Mr. Choi protested. 

“You ruined me,” he continued. “You have to live with it. I hope you go to sleep and you think about me…I hope you die.” 

Breaking up with your financial advisor can be an emotional and stressful event — almost as traumatic as a romantic break-up. The reasons are also somewhat similar: “I’ve found someone else (another advisor). I’ve changed and my needs are different (I’m done with mutual funds). I want to go out there on my own and explore my options (I’m signing up with a discount brokerage).” 

Your relationship with your advisor is highly charged because it is based on that all-important thing: your life savings. But getting out of the relationship needn’t involve any shouting or tears. 

“Initially in the relationship, you put a lot of faith in this person, when it doesn’t work out, trying to communicate with someone that you’ve lost that faith or that it didn’t work out is quite a personal thing,” says Kathy Waite, a fee-only advisor who serves clients in and around Saskatchewan. 

So what happened between Mr. Choi and his financial advisor to merit the vitriol? 

The advisor approached Mr. Choi, a 32-year-old director at a Toronto news station, about six years ago. At the time, they were work colleagues. 

“I figured, ‘Oh, this guy is going to be looking out for me.’ He was a friend to begin with. With the banks, they never follow up with you but with this guy, he was more active.” 

They went over his goals. They talked about his short-term plans of getting engaged and putting a down payment on a home. They did not discuss in detail fees. 

About a year or two later, Mr. Choi was chatting on a discussion board when someone suggested he look into the fees associated with his mutual funds. 

“I called the firm directly and said, ‘What am I paying as far as fees are and if I need to pull this money out, am I being charged for it?’” he says. 

They explained his management expense ratio and his deferred sales charges. “They said, ‘If you want to withdraw, you’ll be paying five to six percent.’” 

“It was a huge hit. I was in total shock.”  

He reached out to his advisor for an explanation and received little response. He then spoke to the advisor’s supervisor. “In the original paperwork, the advisor actually wrote that in the short-term I’d be looking for a home. When I presented that to the manager, he said, ‘If you said ‘short-term,’ why would he put you in any funds with a back-loaded fee?’” 

Mr. Choi transferred his funds out of the company and the company decided to waive the fees. The advisor was eventually let go from the firm. 

“It’s an industry that works very much on referrals. That’s how advisors get their clients, [they’re] friends of friends,” Ms. Waite says. “I’ve had clients who are not happy but [their advisor is] a friend of [their] son’s. That has been a real problem. How do you have a dispute with someone who is an acquaintance or a friend?” 

Even if your advisor isn’t a personal friend, money is a sensitive issue. And money issues can seem complex to the average person. If clients go in unprepared and try to discuss their concerns, they may get blasted with “a load of jargon and leave defeated and belittled,” Ms. Waite says.

“Have some confidence and know your facts. You have rights. No one cares about your money more than you do. You don’t have to apologize for not being happy.” 

That being said, there is a good way and a bad way to approach your advisor with concerns. No one is recommending you recreate the court scene from A Few Good Men (“I want the truth!” “You can’t handle the truth!”). 

“I’d go in and try and have a dialogue. Let’s treat each other with respect,” Ms. Waite says. 

“Unfortunately, what I hear is, the majority of times, the advisors go on the defensive. They’re used to telling people what to do. If you turn around and question that, don’t be surprised if they’re not comfortable with what you’re saying.” 

If the talk doesn’t work out, put it in writing. Pen a polite letter — state the issues, your evidence and a deadline for a response — and stick it in the mail. “[Also say,] ‘I’m willing to work with you to find an amicable resolution but I will escalate it.’ You have to be willing to say who you will escalate it to,” she adds. 

Escalate the issue in writing with the firm; they have 90 days to respond to a complaint with its final decision, according to Investment Industry Regulatory Organization of Canada (IIROC). If you are not satisfied with the way the firm handled your case, you can contact a regulatory agency or seek arbitration or legal recourse (which could be costly). 

To report a suspected regulatory violation, you can reach out to IIROC or the Mutual Funds Dealers Association; they investigate complaints and dole out disciplinary action, including fines and suspensions. 

 

Stay tuned for Part 2!!!

 

 

Trusted Regina’s Finance Experts - why not give them a call to see how they can work for you!

 

 

Trusted Regina Financial Expert from Worby Wealth Management tip on making wise financial choices

Finding the shortest and safest route to any of your dreams requires planning and only with a carefully thought out financial plan can you be sure to make the most of your resources and to protect against risks along the way. At Worby Wealth Management, Chris will do his best to help you achieve those dreams with a plan that is tailored to your specific needs and based on your individual situation.

Let Trusted Regina Financial Adisir Chris Worby of  Worby Wealth Management help you live your dream!

Helping Clients Make Wise Financial Choices:

My Client Is Making a Terrible Financial Choice. What Do I Do?

When panic drives someone to make a self-destructive money decision, it's the financial adviser's job to protect the client from himself.

Suppose one of my clients has his heart set on using half of his retirement account to buy each of his grandchildren a new car. Or a client in a panic over falling markets wants to sell all her stocks and buy gold. What is my responsibility as their financial planner? How far should planners go to try to keep clients from making serious financial mistakes?

It’s important for planners to respect clients’ competence and ability to make their own life decisions. Client-centred planners also need to remember that the goal is to help clients get what they want, not what the planner might want or think the client should want. On the other hand, should a planner stand idly by and watch someone walk off what the planner perceives as the edge of a financial cliff?

Part of the answer to this dilemma stems from a planner’s legal obligation. Most advisers who sell financial products have no fiduciary duty and are not legally required to put their customers’ interests first. Fiduciary advisers, which include those who are fee-only, do have a legal obligation to act in their clients’ best interests.

What is the legal responsibility, then, of a fiduciary planner who believes clients are about to do themselves financial harm?

Let’s say I have a client who is about to do something that may be viewed by a court of law as “extreme” or “imprudent.” (An example would be putting all his money into one asset class like gold, cash, or penny stocks.) At the minimum, I would need to protect myself by carefully fulfilling my legal responsibilities. This would include making certain I emphasized to the client that, given the research and data available, his actions could hurt him financially. I also would want to be sure the client fully understood and took responsibility for his actions.

In terms of the broader aspect of what financial planners owe to their clients, meeting this legal obligation is not enough. In my view, fiduciary planners’ obligation to put clients’ interests first includes an ethical responsibility to do no harm. Sometimes this ethical and legal responsibility requires planners to give clients the information they may not want to hear.

As we focus on the clients’ goals and help them carry out their wishes, part of our role is to make sure they have all the information they need. This gives us a responsibility to educate ourselves so the advice we offer is as sound as we can make it. We also need to do whatever we can to help clients hear and understand that advice.

Clients who are hovering on the edge of a financial cliff are typically about to act out of strong emotions such as fear. They often can’t take in financial advice until they are able to move through that fear. It only makes things worse if financial advisers shame clients, bully them, or abandon them to their fears. The challenge for planners is to help clients reach a more rational place so they can gather additional information and make decisions that will serve them well.

 

With the right kind of support, clients are almost always able to get past the fear that is pushing them to make imprudent decisions. Providing such support by working with clients’ emotions and beliefs about money, perhaps with the help of a financial therapist or financial coach, is well within a financial planner’s ethical responsibility. Our role is not merely to do no harm. It is also to use all the tools we have to help clients act in their own best interests. 

 

Check out his listing on the Regina Directory in the REGINA FINANCIAL SERVICES category. Chris is a Trusted REGINA FINANCIAL EXPERT

 


 

Some of the services that Worby Wealth Management can help you with: 

TRUSTED REGINA FINANCIAL ADVISOR Chris Worby from Worby Wealth Management helps you live your dream!


Chris Worby a Trusted Regina Financial Expert talks about Using a Safety Net:

Finding the shortest and safest route to any of your dreams requires planning and only with a carefully thought out financial plan can you be sure to make the most of your resources and to protect against risks along the way. At Worby Wealth Management, Chris will do his best to help you achieve those dreams with a plan that is tailored to your specific needs and based on your individual situation.

Let Trusted Regina Financial Adisir Chris Worby of  Worby Wealth Management help you live your dream!


Using a Safety Net:

Worby Wealth Management a Trusted Regina Financial Consultant talks about your Emergency Fund.

Say in the same month you have your water heater go, your car needs $2500 worth of work and you have to take an emergency trip to see an ailing relative. Where is that money going to come from? Many people know we should save a few months’ worth of expenses for the ‘just in case’ times but very few people know how to.

• How much money should be in an emergency fund?

• How to build one

• How to use it for annual ‘fun’ items I’ve heard it said that you should have 3 to 6 months’ worth of expenses handy on a ‘just in case’ basis.

I generally think a dollar amount is a better idea. Think of how much makes sense for you but a good guideline is somewhere in the $10,000 to $15,000 range – that is enough money to deal with most household’s finances for a couple of months in the event of job loss or such but still allows for funds to go towards longer terms goals like retirement.

Building one can be difficult but really, the best way is to set up a high interest rate account separate from your regular chequing account and send money there from every paycheque. Now that you know what your goal amount is, you can target that and, if you want to go from $0 to $10,000 over the course of 4 years, it’s going to be $2500/yr or about $100/bi-weekly. It may take some time to build this up so I often recommend using tax returns or some other once a year source of funds like bonuses to get this done more quickly.

Finally, I get asked how to budget for an annual trip or some such pretty regularly – this fund can help. Say it’s established and you are ticking along just fine at around $12,000 and you have decided this is good for your household. Once that fund gets above that amount, you have spending money! Say you want to take the family to Mexico during the winter every now and then, whenever you have $17,000 (if it costs $5000), you are free to go. Emergency funds, they are helpful and very few people have them. Give me a call or email and we can figure out how to get one up and running for you.

 

Chris Worby is a Trusted Regina financial advisor and Wealth Management consultant servicing local Regina households and businesses since 2001.

  


 

Some of the services that Worby Wealth Management can help you with: 

TRUSTED REGINA FINANCIAL ADVISOR Chris Worby from Worby Wealth Management helps you live your dream!


Chris Worby a Trusted Regina Financial Expert from Worby Wealth Management talks about Being Happy with your Money

Finding the shortest and safest route to any of your dreams requires planning and only with a carefully thought out financial plan can you be sure to make the most of your resources and to protect against risks along the way. At Worby Wealth Management, Chris will do his best to help you achieve those dreams with a plan that is tailored to your specific needs and based on your individual situation.

Let Trusted Regina Financial Adisir Chris Worby of  Worby Wealth Management help you live your dream!

Get Happy with your Money! 

I talk with a lot of people about their finances – a lot – and if there’s anything I have learned it is that people are not happy with their money. They feel guilty about their spending and savings habits, feel they need to justify purchases and always end the month without.

Mike Rowe, host of ‘Dirty Jobs’ answered this to someone who was having a hard time finding a job they were ‘happy’ with:

Happiness doesn’t come from a job. It comes from knowing what you truly value, and behaving in a way that’s consistent with those beliefs.

Every household, no matter what stage of life – married, single, divorced, retired, etc – can benefit from considering their values as it relates to their finances, investing, goal setting, etc. Once the values have been established, the decisions become easy.

Let’s talk about these values for a few minutes. First, let’s talk about spending. If a household sat down and said, “We value being debt-free,” a number of decisions get really easy. “Should we buy a brand new car that will take us 8 years to pay off?” “Should we buy a brand new house with an accompanying $350,000 mortgage?” “Should we apply this work bonus to our mortgage using a pre-payment option?” Easy questions to answer once the household value is identified.

How about investing? “I value long term growth over safety and low volatility,” is a different statement from, “I value security in my investments.” Each of these investment statements means that many strategies are immediately eliminated and need never be considered again – how’s that for simplifying the decision-making process!

One of the issues here is that some values are ‘better’ than others – or so we think. There is no inherent benefit to valuing security overgrowth or vice versa. The important part is to follow your values so that your investment experience matches your values.

Values-based investing isn’t about the investment itself – it’s about you.

If you don’t know what your values are, contact me and we can figure it out together. 

Chris Worby is a Trusted Regina financial advisor and Wealth Management consultant servicing local Regina households and businesses since 2001.



Some of the services that Worby Wealth Management can help you with: 

TRUSTED REGINA FINANCIAL ADVISOR Chris Worby from Worby Wealth Management helps you live your dream!


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