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The Globe and Mail Adviser Evaluati

Nothing punctures client complacency about investment advisers like a bad year for the m
year 2015 was a notably bad one for investors, and advisers should absolutely be held acc
scientific about assessing your adviser, not emotional. Using our Globe and Mail adviser ev
judge your portfolio, and assess the broader relationship with your adviser.

I am happy with how my portfolio has performed in 2015


Notes: You lost money in the past year? Thats the kind of year it was. Pros who manage some of the c
water as of mid-December. That tells you its unexceptional for your portfolio to be in the red.
The amount you lost is the key. To judge the severity, compare your portfolio components to the appr
FTSE TMX Canada Universe Bond Index for your bond holdings, the S&P/TSX composite total return ind
your U.S. stocks and the MSCI EAFE total return index for your international (outside North America) h
price gains or losses.
The firm PWL Capital posts major stock and bond index returns on its website (https://www.pwlcapita
calendar 2015 should be available after the turn of the year. If you own U.S. or international funds wit
S&P 500 and EAFE indexes. Unhedged funds should be compared to these index returns expressed in

I have some duds in my portfolio, but the damage was contained


Notes: Canadian stocks were awful did you have exposure to the U.S. and international markets, wh
your adviser mix them judiciously into your portfolio so that they didnt crowd out bonds? Junk bonds
your holdings, maybe 5 per cent or thereabouts? Energy was a portfolio killer did your adviser limit y

My portfolio accurately reflects my tolerance for risk, even after 2015


Notes: Clients typically over-estimate their ability to tolerate losses like we saw in 2015. Partly, this is
industry are lame and cause people to under-estimate their ability to live with risk. Good advisers und
overwhelmed by your losses in 2015, its a sign that your adviser wasnt in sync with your risk toleran

My long-term results have been good


Notes: Frankly, one years results are generally insufficient to decide the value of an advisers work on
same benchmarking process as in Step One to assess those longer term results.
The short term matters only if your returns are notably bad. This suggests your portfolio was not well
good advisers always have in the back of their minds.

I have a financial plan and bad years like 2015 were factored in
Notes: One of the signs you have a good adviser is that your investment approach is dictated by a fina
financial goals like a comfortable retirement and putting your kids through university.
As part of the planning process, your adviser will have looked at how much you have saved and how
The adviser should then have calculated the average annual rate of return youll need to meet your g
a loss in 2015 will easily be offset by gains in the future.

I am confident of reaching my goals


Notes: Your answer to this question relates to the extent that your adviser has referred back to your fi
to hear something along the lines of yes, were right on track, or were not on track and heres wha

My adviser has already contacted me to discuss how I'm affected by weak markets
Notes: You should talk to your adviser in depth once a year to discuss your finances, be it in person, b
out update e-mails, particularly in stressful times for the markets. In some way, your adviser should h
questions you might have about the market dramas of 2015.

My adviser is keeping an eye on my debt levels as well as my investments


Notes: Heres a great test of whether youre dealing with a true adviser or just an investment sales pe
be accomplished in two ways by saving and investing, and lowering debt.

I feel fine paying my adviser after a losing year because I got solid advice
Notes: People sometimes ask me why they have to pay fees when their investments lose money. The
based on wide-ranging advice, with investments being just a part of that.

Score Your Adviser


15+ : You've got a good one
12 to 14 : Not bad - maybe schedule a meeting to discuss any concerns you have
9 to 11 : Salvageable, but you should speak up
6 to 8 : Weak
0 to 5 : Mutual fund salesperson
Evaluation Worksheet
bad year for the markets. So let the intensive portfolio reviews begin. The
olutely be held accountable for the way in which they met the challenge. Be
and Mail adviser evaluation worksheet, youll get the context to properly
ser.

If "Yes", If "Kind of", If "No",


type "2" in type "1" in type "0" in Don't type
this column this column this column here:
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manage some of the countrys largest Canadian balanced mutual funds were well under
e in the red.
mponents to the appropriate benchmark stock and bond indexes, minus fees. Use the
posite total return index for your Canadian stocks, the S&P 500 total return index for
ide North America) holdings. Total return indexes include dividends as well as share

ttps://www.pwlcapital.com/en/The-Firm/Market-Statistics). Results for December and


ternational funds with currency hedging, compare them to the regular version of the
returns expressed in Canadian dollars.

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national markets, which did a fair bit better? Preferred shares were a disaster did
t bonds? Junk bonds got hammered did your adviser limit them to a small portion of
d your adviser limit your exposure?

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n 2015. Partly, this is because the risk assessment tools used in the investment
k. Good advisers understand this and build portfolios accordingly. If you feel
with your risk tolerance.

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an advisers work on your portfolio. Three or, better, five years is preferable. Use the

portfolio was not well constructed and left you vulnerable to the kind of market setback

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h is dictated by a financial plan. The plans purpose is to map a route to achieving
rsity.
have saved and how much you contribute to your investments on an ongoing basis.
need to meet your goals. A realistic target in the 5 per cent range after fees suggests

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ferred back to your financial plan over the years to document your progress. You want
rack and heres what were going to do to fix that.

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es, be it in person, by phone or on Skype. Beyond that, its typical for advisers to send
our adviser should have contacted you to provide reassurance and answer any

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investment sales person. The true adviser understands that building net worth must

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nts lose money. The answer is that the client-adviser relationship is supposed to be

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