| After you have conducted your interviews with the prospective advisors, it’s essential to check their background and references. Just as you perform background checks on people you hire, you should do the same with your financial service providers. A quick check can save you a lot of trouble down the road.
Here are the three things you should check.
Background. You can confirm the advisor’s postsecondary degree, dates of attendance and graduation by calling the university or college’s Registrar’s office. For licenses and certification and other credentials, call the organization that grants the designations.
Disciplinary action. To find out if the advisor has a disciplinary history, check out the websites of your provincial securities commission as well as the Investment Dealers Association of Canada (www.ida.ca) and the Mutual Fund Dealers Association of Canada (www.mfda.ca). You can also contact your local Better Business Bureau.
References. When you interview a prospective advisor, be sure you obtain a list of the advisor’s current clients who are willing to provide references. If possible, ask for names of clients with situations similar to yours.
Here are some questions you can ask the advisor’s current clients:
- How long have you been working with this financial advisor?
- What would you say are this advisor’s strengths and weaknesses?
- How often do you hear from your advisor?
- Are your calls or emails returned promptly?
- What do you appreciate most about your relationship with this advisor?
- Do you have any reservations about recommending your advisor?
- How would you rate the services you have received: excellent, satisfactory or less than satisfactory?
Once you have finished checking your prospective advisor’s backgrounds and references, it’s time to make a decision.
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