









Their Interests Are Not Aligned with Yours
So how would you know that you’re working with one of Canada’s Top Financial Advisors? Wealth Professional purports to tell you who the top financial advisors are but their ranking measures are what is good for the advisor and the firm, NOT what is good for their clients. Their “criteria” is manipulation masquerading as truth.
These rankings are very amusing and disturbing at the same time.
Look at this silliness from Wealth Professional Canada’s Top Wealth Advisors 2022 list:
“Wealth Professional’s Top 50 Advisors for 2022 managed nearly $30 billion in assets last year – a healthy jump from the $18.5 billion in AUM across the 2021 Top 50. The honourees on the ninth annual list represent seven provinces, although nearly two-fifths hail from BC and 30% work in Ontario.”
In terms of industry experience, this year’s Top 50 Advisors range from just six years in the business to 38 – but three-fifths of this year’s winners have more than 20 years of experience, which speaks to the value of their dedication to the financial advice profession” (their experience is related to selling investments, not in being dedicated to providing financial advice!)
Methodology
“To compile the annual Top 50 Advisors list, WP first solicited nominations from advisors, industry professionals and clients; only advisors nominated were eligible for the list. All information on nominees had to be verified by their compliance team before it could be accepted.
The final list was determined on the basis of each advisor’s weighted ranking in overall AUM, AUM growth and client growth (both between October 2020 and October 2021), as well as the advisor’s certifications beyond a bachelor’s degree and basic securities licence.”
The insanity continues around the criteria used to determine the country’s Top 50 Advisors. In my view, Wealth Professionals methodology is nonsense and completely flawed. “AUM, AUM growth and client growth (both between October 2020 and October 2021), as well as the advisor’s certifications beyond a bachelor’s degree and basic securities licence”. That’s just plain crazy talk. In the real world there is no connection between assets under management (AUM) and revenue generated for their firms and being a top advisor from their clients’ point of view. Their criteria for making the list has absolutely nothing at all to do with the clients’ experience, service levels, client goal achievement, getting the clients ‘entire financial house in order, the client actualizing their ideal financial future, the client living a better life or any other measure important to clients. Isn’t this a little backwards? It really has to make you wonder who has your back.
All the criteria in the rankings are about the advisor’s ability to gather assets and generate revenue for their firms which has nothing to do with client outcomes…meaning that the advisors on this list are the top salespeople in the industry, not the investment advisors who are serving their clients at the highest levels. The reality is that as they add more clients and assets, their time available to serve each client declines. When do they have time to SERVE these clients if growing their client base is their highest priority? Remember, if they don’t sell you investment products, they don’t get paid and no revenue is generated for their firms.
Shouldn’t Canada’s Top Advisors list be comprised of the advisors that are delivering the most value to YOU the client?
Advisors should be ranked by the quality of the client experience, the client achieving their financial goals or the client getting their entire financial house in order. Their fees should include things like creating an overarching financial strategy, creating a separate plan for every client goal, tracking client progress on each goal and alerting clients whenever they are off-track to their goals, making course corrections, ensuring that wills, trusts and estate plans are in place and are funded (50% of trusts are never funded). It should also include tax planning and preparation to ensure that taxes are minimized, annual insurance audits and adjustments, and most importantly, ensuring that the client is actualizing their ideal financial future and living a better life. How many of these so-called top advisors provide these services just highlighted?
What would you call a person whose job it is to sell products on which they make a commission?
If you said salesperson, you would be correct. It might say “Wealth Manager” or “Financial Advisor” or even “Trusted Advisor” on their business card, but you must learn to ignore those misleading titles and the “national brands” and “trusted institutions” they represent. These are the tools of distraction and misdirection!
When do these salespeople have time to serve their clients if gathering more Assets Under Management (AUM) is their highest priority? As a consumer, aren’t you curious about how much value they actually provide to the CLIENT?
Canada's Broken Financial Services Industry
The financial services industry views success as Assets Under Management (AUM). Bigger is always better. The scary part is many consumers support the madness because they just don’t know better. Advisors say this aligns their interests with yours, but it’s just a commission, plain and simple. So, the more assets they gather, the greater their commissions. If they get a 2% commission and your portfolio drops by $100,000, what is your loss? What is their loss? I don’t think I would characterize that as “aligned.”
High-earning professionals and business owners are sitting ducks for private banks, wealth management firms, and investment brokers with posh-sounding names and offices. They are fooled and hypnotized by their flashy fabricated titles like “First Vice-President, Portfolio Manager, and Investment Advisor.”
It’s nice to feel important and be approached. Perhaps it helps us feel like we’ve “made it”. These businesses aren’t interested in creating a long-term investment strategy and helping you stick with it. They’re interested in flogging you an in-house investment portfolio stuffed full of hidden fees with no performance guarantees.
So, it’s likely you get a cookie-cutter approach that any logical, academic, independent analysis would utterly destroy. You’re being fed great sales and marketing at a very high cost.
It’s strange that so many professionals value professional independence and fiduciary duties but fail to apply the same rigor when taking advice on their own finances. Rather than seek out advisors who work as a fiduciary, they accept the vast majority who operate with lower suitability standards.
But, what about the perks??
That complimentary invitation to the prestigious sporting event simply isn’t worth the years of extra work that will be required for you to reach your goals because of excessive fees.
Smoke and Mirrors
Time and time again when I interview new clients all they have ever received from many of the so-called reputable firms and advisors was “money management” and possibly a few other peripheral services of little value. There are generally discussions around the markets, economy or the world – all things that the advisor has absolutely no control over… but which the advisor pretends to know how to manage.
As a result. there is a lot of smoke and mirrors, classic sales tactics (selling fear and greed), inaccurate crystal ball forecasting and industry jargon. Remember, first and foremost they are paid to sell products. As a result, the only service provided is them selling you an in-house investment portfolio stuffed full of hidden fees. Even if they do happen to beat the market, which is very unlikely, you likely still lose after deducting fees.
Can you trust the biggest institutions?
Another real concern is that many consumers have a false sense of security when they trust large well-known institutions. Investors simply assume with confidence that they are in good hands. They believe they have added protection because they are working with a big brand name institution. These beliefs could not be farther from the truth. These institutions simply have massive marketing budgets and distribution. None of that means they have your back.
Titles Mean Nothing
There are a lot of titles in the marketplace – Senior Vice President, Senior Investment Advisor, financial advisor, financial planner, wealth manager, private banker, private wealth etc. There is no standard definition of what these terms definitively mean and /or a standard requirement of what should be provided to a client. The reality is these titles are meaningless marketing.
You might be asking yourself, “Where do I find the right Financial Consultant near me who charges a flat fee and will treat me fairly?” “Where can I find an advisor who can create an Integrated Aligned Overarching Strategy?” or “Where can I find an advisor who will only invest my money in proven passive investments? We suggest that you interview several. You’ll quickly learn that there are very few who are fiduciaries, believe in passive investing and have a process to create an Integrated Aligned Overarching Strategy. When you do find the right advisor, you’ll be able to relax in the knowledge that you are in the right hands and that your financial future is secure. Feel free to reach out to me with your questions. I’m committed to investor education.
Dean Kendall is a Financial Organizer in Calgary, handling all of the financial affairs for a select group of clients who value unbiased quality advice for one simple flat fee.
His book - Stop Paying Hidden Investment Fees! Click here for more information https://www.ideallifeexperience.com/Stop-Paying-Hidden-Investment-Fees
Newest book - Becoming The Champion of Your Dreams: How to Set and Achieve Your Most Important Goals Click here for more information. https://www.ideallifeexperience.com/Becoming-the-Champion-of-Your-Dreams
In addition, Dean is a 3X Canadian National # 1 Amateur, a 5X Canadian National #1 Professional BMX rider, downhill mountain biker and an avid snowboarder. He is an expert at winning. Let him show you how to win the money game. You can reach Dean at dean@ideal-life-experience.ca or Phone 403-543 -7226
©Copyright 2008 – 2022 by Dean Kendall. All rights reserved. 403-543-7226 dean@ideal-life-experience.ca