A recent survey of cana-dian investors conducted for the Toronto-based Financial Planning Standards Council has found that only a minority of clients knew much about the qualifications and ethical obligations of financial planners and advisors.
The survey results suggest advisors need to explain their qualifications to their clients at the start of their relationship, says Cary List, president and CEO of the FPSC.
“In the context of your role,” says List, “whether you are a chartered financial analyst, a certified financial planner, a chartered accountant or are non-designated, you should be recognized as a professional, not as a transactional individual.
“Right up front,” he continues, “identify the terms of the engagement. Set out what it is you can do and are going to do for your client, and get your client to sign off on it.”
Among other things, the FPSC survey found that most Canadian investors (70%) thought financial services industry professionals needed to be licensed in order to describe themselves as a financial planner — true only in Quebec.
As well, more than half of survey respondents (54%) believed that all financial advisors are accountable to oversight bodies that ensure they provide ethical and competent service to their clients.
The FPSC, which regularly conducts investor surveys such as this one, promotes and administers the CFP designation and would like the CFP to become the national standard for financial advisors.
Adrian Mastracci, president of Vancouver-based KCM Wealth Management Inc., believes the onus is on the client to determine what basket of financial services and advice he or she wants from a financial professional. Then, the advisor will help determine whether the advisor’s skills and services are a fit.
Says Mastracci: “That is one of the first questions I ask: `What are you looking for? How do you foresee us working together?’ And then I shut up and listen.”
KCM, he says, spells out as clearly as possible what it does. The firm describes itself as “fee-based portfolio managers and financial advisors. Our specialty is designing and managing client investment portfolios.” IE