Q: I have had the same investment adviser since 2009 after I received an inheritance. Things were great at the start. His responses were timely. I watch BNN frequently and ask for his recommendations when I hear of a stock I find interesting.
Recently, he hasn’t returned my emails and I am finding cash from dividends sitting in my account not being reinvested or I’m not being called to see what he recommends or where I would like to see it go. Most of my funds are managed by a “Partners Account.”
Am I being a pain with all my requests? Has my adviser lost interest? Are my investments too small for his attention ($600,000 +/-)?—John
A: Unfortunately, John, the financial industry can sometimes be a front-end loaded experience. That is, much of the work and attention may be focused on landing you as a client and then the customer service may dissipate.
In many industries, customers tend to be sticky if a lot of work is otherwise involved in leaving and the investment business tends to be that way. My experience has been that the average investor is not that engaged in their personal finances and that includes their investments. Seeking out a new investment adviser and breaking up with your current adviser then tends to become quite the chore unless you’re really disappointed or you’re reasonably proactive.
Regulation has made it more important for financial advisers to check in with clients on an ongoing basis these days, so ongoing client contact seems to be improving generally. But it’s still not uncommon, John, to feel a little less love as your investment relationship progresses.
With an account size of $600,000, you are certainly not a small account. Your account may or may not be small relative to your adviser’s other clients, but it’s certainly large relative to most Canadians. Regardless, it’s everything you’ve got and that’s really all that matters.
If any professional ignores your emails, that’s a bad sign. Slow or brief responses are one thing. Outright ignorance is not bliss. I’d be worried about your adviser ignoring you and call him out on it.
The Partner’s Account you have most of your money in may be a managed account where investments are bought and sold on your behalf on a discretionary basis, John. So it might be that your questions about buying or selling individual stocks may not be of interest to your adviser or may not be a good fit for your adviser’s investment approach.
It’s important to ensure that your investment approach is in line with that of your adviser. Many advisers these days use a more formulaic approach to investing or prefer a model portfolio over discussing, buying and selling stocks on a sporadic basis. So you and your adviser may no longer be a good fit—and it’s worth asking the question specifically. You may need more of a traditional stock broker instead of an adviser who puts your money into a managed discretionary account.
If you’re unhappy with your adviser, talk to them. Don’t be shy because you’ve worked together for a long time or they helped you through a rough patch or they’re you’re brother-in-law. It’s your money and if you’re not happy with what they’re doing with it, what they communicate with you or what you’re paying them in fees, don’t stand by idly.
Sometimes advisers need to be fired. Sometimes advisers want to fire clients but ignore them instead. You should always prioritize your retirement savings ahead of hurt feelings or helping your adviser save for their own retirement at the expense of your own.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.