Financial Planning: A Matter Of Trust.

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Often financial planning can be neglected due to a bad experience. During my years as a financial advisor, I have come across many individuals who have not done any updated financial planning because they were either jaded by a financial institution or by a financial advisor.

Only two weeks ago, a major Canadian bank had it ratings go down and stock prices fall because of a negative report made by some of its employees. According to a CBC report, employees claimed that they were under pressure to meet quotas and were overselling their customers. The problem is that when a customer feels jaded or high pressured into a sales transaction they may not tell you directly but will certainly tell all of their friends.

Financial planning is a matter of trust between a client and his advisor or financial institution and every financial advisor is required to follow a set of principles or guidelines. Check the following to see if your financial advisor meets or practice these:

  1. Placing the clients’ interest before their own. Each financial advisor regardless of what he is going through, whether it be a contest, quota or commission deal must place the client’s interest first by asking “Would I do the same for me if I were the client?”
  2. Acting with integrity. Doing the same thing when no one is watching is an important attribute that tells whether your advisor is acting with integrity. It’s not only the letter of the law that is being observed but the spirit of the law as well.
  3. Being objective. Taking the customer’s needs and suitability as foremost when dealing with a client. Not every product is suited for each client and an advisor must not be lured into selling a product for the sake of compensation or pressure when making recommendations. To be objective an advisor must seek the interest of the client.
  4. Maintain a level of competence. If you have a doctor you would expect that your doctor has been keeping current with all new medical technology and procedures etc. Well, the same should be expected of your financial advisor. He should be continuously expanding his knowledge and keeping abreast of all new changes. In addition, an advisor should know the limitations of his practice and enlist the help of other professionals.
  5. To be fair to our clients. Disclose all transactions which could represent a conflict of interest to our clients. We need to disclose all the facts that are material to the transaction and deliver on what we have promised our clients.
  6. Confidentiality. Are you worried that your advisor may be discussing your financial situations with others? While you may never know, you need to know that as your advisor, he is supposed to keep all your information as confidential as possible.
  7. Being diligent with the client’s financial planning process. Analyzing their situation properly, completing a Financial Needs Analysis before making any recommendations.
  8. Acting professionally. Being committed to the career, taking pride in your work and not being a part timer. Represent the fact that this is a very serious profession where clients put their faith you.

If you have a financial advisor that you have lost faith or trust in, do find another one so that you can continue to attend to your financial affairs properly.


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