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hy do clients re their investment advisers? Changing advisers requires considerable effort on the part of the client, so what motivates them to decide it is time for a change? The Financial Advisor magazine surveyed almost 1,400 advisers in the U.S. about why clients had red their previous adviser. This survey gives us an inside look at what motivates someone to look for change. First on the list, at 72 per cent, is the adviser's failure to communicate on a timely basis. The client's investments represents their ability to achieve their desired lifestyle. Communicating on something as important as one's life goals needs to be done on a timely basis. Failure to respect that principal is the largest single reason why an adviser is replaced. Failure to understand goals The second reason is the adviser's failure to understand the client's goals and objectives -- that was mentioned by 51 per cent of respondents. Understanding a client's goals and objectives is the foundation for any relationship. It is impossible to provide the appropriate advice and service without knowing a client's needs. Reason No. 3, at 43 per cent, is a failure to return telephone calls. Being ignored by an adviser who is earning money to provide advice is just plain rude. Clients select an ad- W Why investment clients are firing their financial advisers Dollars & Sense Peter Watson Guest Contributor 31 | Thursday, May 15, 2014 | OAKVILLE BEAVER | www.insideHALTON.com not keep, with a 22 per cent rating, is the fth reason clients look for a replacement. No one likes to be told certain nancial situations will happen only to be disappointed. In my opinion, this reason could have been higher on the list. Over-promising returns dangerous Over-promising in the world of investments can be dangerous. Particularly in the area of forecasting investment performance. This is often done after a few years of above average returns. Some advisers may predict these above average returns will become the new norm and continue. You want to have achievable assumptions when long-term cash ow projections are done to see if there will be enough funds available to educate your children after high school or plan for retirement -- that is critical. viser to help them navigate through the confusing environment of investing. Answering clients' calls should be done promptly. Producing poor results A fourth reason is the adviser has produced poor investment performance results. This was a factor 34 per cent of the time. The adviser, however, does not have any control over the market. Poor advice and service can be a cause for concern, but poor investment performance might be the market's, and not the adviser's, responsibility. The opposite may also be true. When the market goes up and you are pleased with your adviser, it may be the market that produces the result. There may be cases where, regardless of market performance, you have an adviser you feel does not have the ability to get you the investment returns you want. In that case, it may be useful to change. Finally, advisers making claims they can- Over-estimating returns on investments is dangerous. Conservative assumptions are what is needed when estimating how an investment portfolio might grow. Otherwise, you will have a false sense of security when a more reasonable assessment of your circumstances is needed. You may have to save more or reduce your expectations. These top ve reasons of why clients change advisers only tell half of the story. The other half is how hard it is to make that decision to leave. Investors are often not con dent in their ability to select a new adviser. They have changed advisers before only to nd their new aide is a lot like their old one. -- Submitted by Peter Watson, MBA, CFP , R.F .P ., CIM, FCSI., Certi ed Financial Planner Halton.ca 311 Notice of Construction Wastewater Main Replacement on Chisholm Street from Bond Street to Walker Street Town of Oakville PR-2942 Finals at the Magna Corral on September 12th $1,000 Cash YAMAHA AC3R VS acoustic-electric guitar and case One full day recording session at Metalworks Studios Perform at the Hoedown on Sept 13th Applicants must be 14 years of age and older All applications must be received by 5pm on June 15th July 10th ­ Preliminary rounds September 6th ­ Semi-finals at Aurora Ribfest September 12th ­ Finals at Magna Corral September 13th ­ Perform at the Wild Wild West Hoedown Enter Now! SPONSORED BY Contract Number: Scheduled Start Date: Scheduled Completion Date: Project Manager: For contest details go to www.hoedown.ca SEPTEMBER 5-7 S-2942-14 May 2014 July 2015 Martin Larkin 905-825-6000 x 7614 martin.larkin@halton.ca 150514 Please contact us as soon as possible if you have any accessibility needs at Halton Region events or meetings.