Client Statements

Consultative Approach

Many decisions of a financial nature require careful consideration of the facts and analysis of the specific circumstances. Here are some examples of this type of decision:

  • Pension survivorship options
  • Paying down debt vs. investing
  • Use of tax shelters
  • Savings vs. spending
  • Use of leverage (borrowing to invest)
  • RSP vs. non-registered saving

It is very important to find an expert in the field; someone whose experience you can lean on. A professional will rely on knowledge gained through education, through personal experience, and vicariously through situations they have worked through with their clients. This level of experience allows them to steer you in the right direction.

People often talk to their accountant or lawyer regarding financial matters. These professionals can frequently provide a good second opinion. For specific financial matters however, not all accountants or lawyers have the expertise necessary to deal with the questions asked. When you work with someone who truly specializes in financial planning, you ensure that dealing with this type of questions is their primary focus.

Good advisors make the best interests of the client their top priority. They work with the client to set financial objectives and to structure a plan to reach those objectives. Along the way they assist the client in dealing with the many financial decisions that are required; only some of which involve financial products. We refer to this way of working with clients as the consultative approach. This approach has more to do with understanding the needs of the client than it does with the sale of product.

What is it like when your advisor uses the consultative approach?

1. Your sessions with the advisor should focus on you.

The focus of discussions is based on your needs, and your goals. Product related matters are secondary.

2. Negatives and alternatives to any course of action are discussed

Discussions include identification of the things that can go wrong with the strategy being recommended. Many situations are not straightforward and a number of alternatives need to be laid out with all information disclosed in a relatively easy to understand manner.

3. Advisor compensation is fully disclosed.

There are many good advisors who sell products including: GICs, mortgages, life insurance, and mutual funds. All of these products have commissions and fees associated with them. A good advisor will provide complete disclosure of all compensation they receive. Although these amounts are often hidden within the products themselves and are not paid directly by the client, disclosure allows the consumer to make an informed decision taking into consideration:

  • The amount of advisor compensation
  • The value provided by the advisor
  • The potential that good advice may improve their financial situation down the road

If the client feels comfortable with these considerations, the compensation paid will be well worth it. Consider this, if you are working with an accountant or a lawyer, all of this is disclosed upfront during the engagement; the amount you will be charged per hour, and the approximate number of hours involved with the case. The relationship with your advisor should be no different.

Whenever you purchase a financial product or service, someone is making money on that product or service. A certain amount of skepticism is healthy because there is certainly the potential for a conflict of interest. In our opinion however, as long as pricing is competitive, it makes sense to buy that product or service from an advisor that focuses on client needs and provides the highest level of client service.