Some of the differences between me and the bank

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I run into this question all the time, and frankly even if people aren't asking it directly, I know this is in the back of their mind. So what's the difference working with an independent financial advisor as compared to say someone in a bank branch or similar model? What exactly does a financial advisor/planner do anyway? Read on and let me try to shed some light on the industry and profession.

 

The major difference between an independent advisor and a bank branch representative is the use of proprietary products.  When you go into a bank and have an RRSP account that you want to invest, chances are you walk out with recommendations for investments that are  products of the institution.  With an independent advisor you get a very different approach. For example, my practice isn't owned by Manulife Securities and if you prefer to hold investments that are through another institution it’s not a concern. Instead of a group of proprietary products I build a portfolio based on you, your risk tolerance and your goals. This completely customized approach is entirely different from what you get at a bank branch.

 

Going hand-in-hand with that is that many bank branch representatives are licensed through a body called the MFDA. This is the Mutual Fund Dealers Association, whereas my license is held through an organization called IIROC, (the Investment Industry Regulatory Organization of Canada).  There are some significant differences here, notably that advisors who are IIROC licensed are able to use securities such as ETF's, single securities and many other vehicles for their clients.  This alone provides much more independence and a lack of proprietary products. How crazy would it be if all of my clients had no choice but to hold Manulife Financial shares based on my offering securities through Manulife Securities Incorporated?

 

Rather than getting a slate of investments that are chosen specifically because of the label, I believe that consumers should have their investments open to broader competition. They should have investments that help them reach their financial goals and the provider of those vehicles should really be a secondary consideration.

 

 

Being a financial advisor  is more than just picking a few investments and leaving it at that. I can help you plan for both short and long-term goals.  I help clients figure out how to hold their investments as well as what investments they hold; I can show you what makes the most sense from a tax perspective as well as from a pure investment perspective.  In addition, I can go through your insurance coverages as well on an independent basis.  While my signs and business cards say "Manulife" I am free to provide you with the products and services from a number of companies that might make more sense, be more cost effective, or both.

 

I'm sure that I will write more posts on this topic because it’s a question I address regularly.  That said, these are the core differences between what I can do for you and what you get at a bank branch. You can expect future posts on the impact that a true independent advisor can make for you in terms of your planning and your overall situation.