My point is that of course there are some people in every field that will rip you off in some way by overcharging or supplying inferior services but I think it is unbalanced to obsessively assume that the vast majority of people [overall or in any one category] are deceptive and only interested in making money with no regard for their clients.
Are all cops racists? Are all lawyers despicable people? Are all financial advisors crooks? Are you a simpleton?
............
D.
I think the comparison of financial advisors to other professions such as lawers and medical doctors in the context
of this discussion isn't entirely valid.
For one thing all family doctors are required to have equivalent qualification and expected to provide similar level of services.
The financial advisors average investors talk about are often salesman--the kind
of agents from an institute like Investors Group and manulife
who sell you all sorts of investment products, solutions and
other related financial services. These
advisors are not likely to be held
accountable of their conduct like
the professionals in other fields.
As a rule never expect your advisor
to be as responsible for your financial
health like your doctor is to your
physical health.
On the surface of it an Investor Group representative's
job is to be your financial advisor. In actuality their primary objective is to sell you funds, fund of
funds (and possibly even fund of funds of funds I believe). Your IG agent surely would not want to
see you lose money--it is in their interest for you to make money. Your profit won't be
your agent's primary responsibility but it is highly unlikely that he will intentionally rip you off.
An IG agent I got to know once bragged about how much better
gains made by his clients after switching away from other institutes like Scotia Macleod
and RBC. I am sure he never ripped his clients off. He didn't have to. The hefty management
fees charged by IG funds (which possibly boast the highest MER among mainstream players)
and in case of early redemption (within 5--7 years) the outrageously high deferred sales charge
should more than compensate for any financial advices he offered.
I do not mean to slam this kind of financial advisors for I believe they do have
a role to play in management of the not so well-informed investors money. The problem
is just that their role isn't generally well understood by the people who use their services.
There are of course bona fide financial advisors around. But they are substantially
more expensive than your typical financial planner. The other problem is that it would
take a investor with considerable knowledge to use such financial advisor effectively.
In such case the need for an advisor is optional.