Preparing To Meet With a Financial Adviser: Part 2: The Meeting

In Part One of our series on Preparing to Meet With A Financial Adviser (The Meeting), we focused on action items to take in preparation of a meeting with a prospective or existing financial adviser. You are now through the door and sitting down with the adviser. How do you approach the meeting so you are getting traction with pursuing your financial objectives? In Part 2, we highlight some action items should be factored into your meeting with a financial adviser, especially when you are discussing investment opportunities.


Make an Agenda
If you are meeting with an adviser for the first time or having a regular meeting with an adviser, you should already have in your mind and on paper, a structure for how the meeting will go. The meeting is about you and you are driving the discussion, so you want to make sure that the items you need address are covered off and that the meeting is not going off on a tangent because the adviser is talking about a product that has nothing to do with your action items.

When you are meeting with an existing adviser, the agenda should have a structured format. Remember you only have a limited time. The goal is to get through the small-talk and stay focused on the key issues you need addressed. In terms of a basic structure, a meeting should follow a format similar to below:


  • If you are working with an existing adviser, you should review previous meeting and action items.
  • Discuss new issues and opportunities.
  • End meeting with new action items and milestone deadlines


The bottom line is you do not want to go into a meeting with nothing or no concept of what you want to take action on. The adviser will sense it and they will then try to lead the discussion to areas where they could potentially benefit more than you.

The timing of this post couldn’t be better. As I was putting ideas to computer, the CBC in their Marketplace consumer program, did a hidden camera investigation on financial advisers . While some portions seemed a bit naïve in terms of the “I have $50,000 what can I do with it?” premise, the piece did highlight some meaningful concepts that are well worth incorporating in your discussion. So in the spirit of Tom Keene, I tore up the script and came up with a few themes for your discussion below.

The Troika
Any discussion you engage with a prospective or current adviser should include getting their insights and philosophies regarding three important considerations that will drive the nature of your investment decisions and potential relationship with your adviser. These are debt, risk, and fees. If advisers are on the ball, they will raise these elements when they first meet with you and they should be referring to these elements if they have already engaged in evaluating investment opportunities with you.


At the onset of any initial discussion with a potential or existing adviser, they should be asking you about your debt situation, specifically if you have any debt outstanding in the form of a mortgage, car, and/or credit. The more cash that is going out to service your borrowings, the fewer savings will be going into your investments. Any discussion involving investment decisions, must consider your liabilities into account when deciding if you can in fact make those investments comfortably and if in the future will be capable of establishing a consistent, disciplined saving program to grow your portfolio. If the adviser doesn’t bring up any discussion involving your debt and you have to initiate that discussion, then that should be a concern to you.

Every investment you undertake, whether it is in a T-Bill or a biotech company in Uruguay bears some element of risk that you can lose some or all of your investment. Your adviser at the outset should be immediately assessing your tolerance for risk and keeping you in check when you try to pursue investment opportunities that are beyond your comfort zone. As the Marketplace piece showed, most of the advisers that were queried didn’t even raise the concept of risk when they discussed various investment strategies. Some even had the gumption to guarantee investment returns in the double-digits. Any investment opportunity that is presented to you has to involve a discussion of the risk factors associated with it and a discussion of your personal comfort level. If it is not, then you should be concerned.

Fees from product commissions are the silent killer in the room, gnawing away at your savings and gains over time . As much as it is important to make investment decisions that grow your savings, you want to do so by minimizing the amount you pay your adviser and the financial companies that sell products to you. In Canada, mutual funds are still the most popular investment vehicle even though they charge some of the highest commissions in the world. Even with the emergence of Exchange Traded Funds (ETF’s) that charge significantly lower fees or Management Expense Ratios (MER’s), Canadians either through inertia, apathy or lack of education continue to prefer to hold high-fee mutual funds. With any conversation with an adviser involving an evaluation of an investment product, you should always be asking for information about the fee structure of the product. Again the Marketplace report clearly showed that advisers can have a hard time explaining a product fee structure and can be vague or dance around the question. DO NOT ACCEPT THIS. Push and push for a breakdown of the fees. If they can’t do it on the spot, give them some homework, set a deadline and hold them accountable.

Fees are an important consideration at the product level, but they are also important to consider at the adviser compensation level. At the onset of any discussion with an adviser, you must ask them how they are compensated. The most common model is either through a percentage of assets basis (e.g. 1 percent of your assets) or on a flat-fee basis (e.g. a fixed annual/quarterly fee). Each hold their respective pro’s and con’s but what is important is that they are transparent so you are aware and can decide accordingly if that structure is in your best interests. If you already have an adviser, you should be periodically revisiting compensation with your adviser to see if there has been any changes in their compensation/fee structure as well as in the products you are invested in. Ideally the adviser should be initiating these, but the last thing they want to do is call attention to it.

Don’t get me wrong, I’m not against advisers getting paid. They are running a business and need to be compensated for their time an effort. Unlike people like myself who get paid to solely to educate and mentor people about investing, financial advisers operate under a conflict of interest in that they are getting paid to sell financial products and are offering advice. This is the main problem with the traditional advisory model. Often, these two elements can conflict an adviser to steer clients towards higher commission oriented assets that may or may not be in their best interest because they are getting pressure from their bosses to ramp up revenues. I think they should get paid but they should get paid to simply execute your investment strategy and provide specialized advice like for example, estate planning, tax planning, setting up a savings/debt payback strategy, and insurance consideration. There are a lot of advisers out there that have a wealth of experience in these areas and are really good at it.

If you are engaging with an existing adviser, you should have engaged in these type of discussions already. If your adviser hasn’t broached these important subject areas, you should raise them as talking points for your next meeting. If they are vague in their response, you should take pause and reflect on whether your interests are truly being looked at especially you know you are for example a risk averse person who has investments in volatile Emerging Market companies.

If They Can’t Explain A Product They are Recommending
A lot of people, including the Marketplace hosts in their report, will criticize advisers when they are tongue-tied when asked a question about a product or a fee and can’t provide an answer on the spot. I agree the optics don’t look good. At the same time, I do have some sympathy for the adviser as in reality it is hard to know every minutiae about every product. You also have a limited time in your meeting with your adviser and you don’t want to waste it, buy having them search for things. If they can’t explain something on the spot, ask them to either go away and find it or send them the info later in the day or next day. Make it an action item and set timelines so there is accountability. If they can’t do that then that’s an X for me. A good adviser is like your research assistant or a financial concierge. They should be able to provide you documentation or references to a treasure trove of research and analysis that you may not find on the Internet. You are paying them so make them earn their fees.

Ask Questions If You Don’t Understand Something
Financial advisers, like any other profession, have their own lingo and terminology for explaining things and it is very normal to not understand some of the terms and concepts. People like to show they know a lot of things by name and acronym dropping at high speed. The goal is to make you look uninformed and that will somehow elevate their importance in the relationship. Remember, you are driving these discussions, so at any point in the meeting if you do not understand something, stop and ask. Keep asking them to explain until you understand. Ask them to send some additional documentation that could help. You need to be informed as you consider and make investment decisions with your savings. If the adviser doesn’t want to take the time to explain and answer your questions, then that should be a red flag.

Ending the Meeting: Establish an Action Plan
As it has been alluded to, at the end of the meeting, you should sum up the key points of discussion for the meeting and more importantly, identify any action items that need to be carried out by yourself and the adviser. The action items are important in that it establishes continuity and accountability on both the adviser AND yourself. When you determine that the adviser will provide you information or process something on your behalf, it is important to set milestones when they will be done. You are not off the hook either. If there is information you need to come up with the same rules apply.

As much as Financial Advisers get portrayed in a bad light, you are still going to need them to help you execute your financial strategy to meet your goals. The important thing is that you should not go into a relationship with an adviser blind and unprepared. If you can show at the outset that you are prepared, have made a serious attempt at educating yourself on financial issues and are taking your financial security seriously, the less likely the Adviser is going to try and pull a sell-job on you. They will realize they will have to pull up their socks and play ball with you.