There have been several articles floating around recently about financial advisOrs vs financial advisErs. Quite frankly I did not know there was a difference. According to the articles, advisors are just sales people, possibly unregulated ones, and advisers have a fiduciary responsibility to act in their client’s best interests.
Scott and I have always called ourselves Investment Advisors. I looked up my most respected colleagues - they too are also Advisors. We do not consider ourselves salespeople but rather professionals. We pride ourselves in how we care for our clients. Our titles are defined by our regulator, IIROC and controlled by our company, in our case Manulife Securities Incorporated. As an IIROC Advisor, we have Investment Advisor, or Financial Advisor as available titles for us.
Are we salespeople? We are paid through assets that we manage for our clients. For the most part, they are fee based – in other words, clients pay a small percentage of their assets as the cost for all of our services. Some clients prefer to pay on commission (i.e. per trade) which we can accommodate. Scott and I are self-employed, we are agents not employees of Manulife Securities Incorporated. We have built a practice in the same way as an accountant, or a psychologist. We answer to our clients, and if our clients are not happy they will move to somewhere they are. With this overlying philosophy, your best interest is always our top focus. In addition, we have to ensure all our practices fall in line with IIROC procedures for client suitability. KYC (know your client) rules confirm that we do sufficient fact finding to make informed recommendations for our clients. Our compliance officers question us regularly on client suitability and appropriateness of investment choices.
We have always been frustrated at the difficulty to differentiate ourselves from mutual fund representatives at the bank or other institutions, who may have minimal training, limited product lines and large sales objectives. It is also difficult to wade through the many different designations available to financial professionals. With all the changes occurring within our industry, I do expect some clarification from our regulators in the coming years. In the meantime, don’t hesitate to ask us (or other advisors) about our designations or training if you have any doubt.