My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, July 30, 2012

Choosing The Right Investment Advisor - Book Giveaway

In late April of this year, I read an article by Eric Lam in the National Post titled “Picking advisor best not left to chance”. Despite being sleep deprived at that point in time, I quickly noticed the article was based on the book  Choosing The Right Investment Advisor by Carol Santamaura, and that the proceeds of the book were being donated to the Princess Margaret Hospital in Toronto.

So why did I sit up and take notice? Well firstly, I have known Carol since she started as an investment advisor and we have had mutual clients for years. Secondly, as I have blogged on the topic of philanthropy, or the lack of it, a couple times, I appreciated the fact that Carol was donating the proceeds of her book to charity. Finally, the topic of Carole's book is of great interest to me. My profession provides me a unique vantage point from which to view the performance of many investment advisors and I can certainly tell you that many people have definitely not chosen the right investment advisor.

Recently I had lunch with Carol to catch-up and talk about her book. The book is an easy read and provides Canadians with a methodical manner in which to choose the right investment advisor for them.

During lunch I asked Carol if she would provide me with some comments on why she wrote the book and some of the key aspects of the book. Carol was kind enough to not only provide that information below, but she also provided me with five free copies of the book.

If you would like a free copy of Carol's book, please email your name to Lynda@cunninghamca.com and I will draw 5 names and send the winners a copy of the book.

Choosing The Right Investment Manager- Comments by Carol Santamaura

 

The goal of my book is to educate the public and simplify the process of choosing the right Financial Advisor. Further, by donating all of the profits to Cancer Research at Princess Margaret Hospital, it also allows me to support a cause close to all of us.

Since I started managing clients’ assets in the early 1990s, I have been fascinated by how people select their financial or investment advisors. This a very important decision; after all, much of one’s financial future is in the hands of this person. Yet, it always astonishes me how little research investors actually undertake before they sign up! Some say, “I met him/her at a party” or “he/she coaches my son’s soccer team.” One person even boasted that their advisor had been a professional athlete.

When I ask prospective clients and high–net worth investors how they selected their current advisors, I expect their answers to be based on the level of due diligence that a responsibility of this magnitude requires: quantitative criteria such as credentials, ethics, or returns. But typically that is not the case.

My research into why people don’t do more research into finding the right advisor has led to the following conclusions:

1) The financial services industry is complicated. 

The financial services industry has witnessed explosive growth over the last several years. Much of the difficulty in selecting an advisor lies in the increasingly complex and confusing nature of the industry. These days, it seems that everyone is a financial consultant of some sort, as the term is now broadly defined (e.g., investment advisor, investment executive, financial planner). There is also a substantial overlap in the products and services that can be provided by companies and individual advisors. Yet another challenge facing the average investor is that he/she may not fully understand what he/she needs or what advisors can provide.

2) The industry itself has done little to inform the public about this complexity. Therefore, investors are very often ill equipped and lack the knowledge and tools necessary to make the right decision.

My book unravels the complexity and provides information about selecting an investment advisor. It covers various topics ranging from what products and services the investor needs, to how to apply selection criteria for an ideal advisor. It also discusses strategies to ensure a long-term successful partnership.

Three informative sections guide readers through the complexities of the investment industry. Section one deals with the kind of investor one is and what sort of advice one requires. Awareness of certain characteristics in one’s own behaviour as it relates to investing clarifies the decision to work with an advisor and helps to identify what kind of products and services are suitable. For example, a conservative investor may want a portfolio made up primarily of fixed-term investments with little volatility. A risk-taker who is willing to take on greater volatility may prefer a portfolio of growth stocks. An ‘in-betweener’ would benefit from, that’s right, a middle path.  

Section two offers practical guidelines and useful tips for finding, evaluating, and working successfully with an advisor.

Section three examines the Canadian investment industry as it stands today, from companies and the services they provide, to individual advisors, their qualifications, and the products they are licensed to sell.

My hope is that people will be better off after having read my book for the following reasons:

1)   they will have greater confidence their advisor acts with integrity

2)   they will be able to sleep at night

3)   they will be comfortable in knowing they made the right choice.

So, whether one is looking for an advisor for the first time, or evaluating one’s current situation, this book provides a perspective on how to take an informed approach to choosing and working with the right advisor.

Carol would like to  dedicate this blog in memoriam of Jill Max, former head of RBC - DS Private Client Bond Desk. 


Carol A. Santamaura is a Vice President and Portfolio Manager at RBC Dominion Securities in Toronto. Carol can be reached by email at www.carolsantamaura.com

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

2 comments:

  1. Sounds like a great reference. Kudos to Carol for donating the profits to PMH in Toronto. What an outstanding cause... :)

    I will email you soon for an opportunity to be one of the lucky winners.

    Will promote on my blog this weekend in my roundup.

    Cheers,
    Mark

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    Replies
    1. Thx Mark--yes, I also applaud Carol for the donation of her profits to such a worthy cause.

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