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Financial advisors are supposed to advise, not just mail out graphs that aren’t being read

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The COVID-19 pandemic is not only having devastating consequences in terms of human suffering and loss of life, but it is also ripping apart the fabric of just about everything we know, including financial markets, which have seen dramatic losses over the last few months. Entire segments of the economy – from travel to manufacturing to retail – have simply shut down in response to the virus. For this reason, it’s important for families to have the right financial advisor in place to help protect their long-term financial stability.

Unfortunately, not every advisor is up for the job.

As in any profession, there are a small number of truly excellent professionals, a vast number of average ones, and some who are truly incompetent, dishonest, or simply not paying attention.

The reality is that most people just don’t know which category their advisors fall into. So how can investors tell if their advisor is really doing the best job possible?

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Here are three basic questions to consider:

1 – Does your advisor actually advise you?

Every investor receives a quarterly report on their portfolio, but that’s just an automatically cranked out computer-generated document. Financial advisors are supposed to advise, not just mail out graphs that aren’t being read. Is your advisor doing everything to keep you in the loop?

Did you get an email in January warning you about COVID and its possible effects on the market – and your portfolio? Did your advisor call you in February to recommend lightening your exposure to stocks as COVID began to take hold globally? If your advisor treated the last three months as “business as usual,” and didn’t protect you from the dramatic losses of late, what are you paying them for?

2 – Is your advisor up-to-date on new legislation?

It seems as though every day there is some new stimulus measure on the books, whether it’s a federal tax break or a provincial wage subsidy. Unless you’re a serious policy wonk, you’re probably not sure exactly what this means for you, especially if you own your own business. As we get through the next few months of COVID-related financial turbulence, whoever is managing your portfolio needs to really understand how to help you take advantage of these new stimulus measures. If your advisor isn’t fully updated on these rapid-fire changes, you should have reason for concern and you may want to look elsewhere.

3 – How does your investment advisor make money?

Understanding how your advisor is compensated, their investment selection process, as well as their ethics, integrity, and qualifications, should be absolutely top-of-mind for any investor. At the end of the day, while legislation will help, it is no substitution for knowing exactly who you are retaining as your advisor.

People tend to act according to the manner in which they are incented, so make sure your advisor’s interests are fully aligned with yours and that it is your best interest that is at the core of everything they do. The perfect place to start is with The Statement of Investor Rights, and this list of Questions to Ask Your Financial Advisor, both created by the CFA institute. These are your rights, and you should do everything in your power to exercise them.

Jesse Kaufman is the CEO of AdviceCheck, which he established in 2019. Formerly a Portfolio Manager at The Kaufman Wealth Group of Richardson GMP, Jesse is a Chartered Alternative Investment Analyst, Chartered Investment Manager, Accredited Investment Fiduciary, and a Fellow of the Canadian Securities Institute.

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Thank you for choosing TheJ.Ca as your source for Canadian Jewish News.

We do news differently!

Our positioning as a Zionist News Media platform sets us apart from the rest. While other Canadian Jewish media are advocating increasingly biased progressive political and social agendas, TheJ.Ca is providing more and more readers with a welcome alternative and an ideological home.

We revealed the incursion of anti-Israel progressive elements such as IfNotNow into our communities. We have exposed the distorted hateful agenda of the “progressive” left political radicals who brought Linda Sarsour to our cities, and we were first to report on many disturbing incidents of Nazi-based hate towards Jews across Canada.

But we can’t do it alone. We need your HELP!

Our ability to thrive and grow in 2020 and beyond depends on the generosity of committed readers and supporters like you.

Monthly support is a great way to help us sustain our operations. We greatly appreciate any contributions you can make to support Jewish Journalism.

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