Poor financial advice is everywhere

CBC Marketplace found a wide range of financial advisers working at major banks, some unable to explain fees on mutual funds and others who neglected to perform basic risk assessments or ask about debt.

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“That’s one of the worst pieces of advice I’ve ever heard in my life,” MoneySense contributor, financial analyst and former adviser Preet Banerjee told CBC Marketplace co-host Erica Johnson after viewing hidden camera footage of a big bank financial adviser telling an undercover customer that her $50,000 initial investment could grow $10,000, even $20,000, a year if conservatively invested.

In its recent investigative report, entitled “Show Me The Money,” CBC Marketplace found a wide range in the quality of advisers working at major banks and financial institutions. Some proved to be knowledgeable and prudent while others were unable to explain fees on popular products such as mutual funds. Some did not perform basic risk-assessments or ask the “client” about their debt levels.

A good financial adviser can help get, and keep, you on the right track but a bad one can steer you wrong completely. The reality is “financial adviser” is not a protected term and professionals are not required to be licensed to dole out advice so it’s up to you, the consumer, to understand the certifications out there and how fees are structured. Read Banerjee’s, “Find the perfect financial planner,” to help get you started. Once you’re comfortable with the different options and terminology, go ahead and interview a number of the planners listed in MoneySense’s directory of fee-only planners.

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