May 13th, 2010 
Category: 
It’s official; I fired my financial advisor for lack of professionalism.
This is how it all started. I was pretty happy with my previous advisor that I chose at the time based on a friend’s recommendation. Last summer, she was promoted to a branch director and all her clients were passed on to another financial planner who already had an established clientele. Unfortunately, I did not get to choose this guy; I was simply assigned to him. All in all we met only once at my request because I wanted to meet him face to face.
Following the one and only meeting last summer, there was never any contact between us for almost a year (except when I asked him on the phone to dump a lump sum in my mortgage last December). On Friday April 30 he got back to me after I left him a couple of messages during the week and we had a discussion in which I requested information on opening a trading account linked to a line of credit dedicated for investing only. He promised to get back to me during the same day or on Monday May 3 at most.
Come Monday there was no sign of him; during all of last week I left him 3 voice messages and ended up emailing him last Friday to no avail. You could have imagined how I felt last week watching the markets having a major correction with no money to deploy, talk about missed opportunities. If you’ve been following this blog, you know me by now; I’m a buyer when everyone is a seller. Needless to say, I was pissed off.
Since I work in downtown Montreal, all the banks have branches close by. So early this week, I took a 5 min walk from work to a branch of National Bank and asked for a new financial planner. We met on Tuesday and I decided to proceed with her as my new advisor. In this process I have to send the new planner an email officially requesting to switch branches which in turn is forwarded to the old planner in order for him to transfer the account.
Lo and behold my ex-planner came back to life that same day; he sends me an email apologizing for the delay because he was out of the office often. This is a case where he either is acting like an idiot or taking me for an idiot, it can’t be both, has to be one of the 2. You see I left him 3 voice messages and an email because his answering machine message of the day indicated he was at the office for that date and asking his callers to leave a message because he will get back to them. Why would I leave you a message if you were not at the office? And even if you were not and I left you a message, why should it take you more than a day at most to get back to me and feed me any bullshit to buy yourself time if you were that busy?
The fact of the matter is that I am not a wealthy client; I don’t buy the bank’s mutual funds and other products. That probably places me at the bottom of his list. All I have is a mortgage at variable rate that I am paying off as fast as possible, so even here the bank is not making the full potential in profits. But I am still a customer, and I deserve a minimum level of service, he should’ve picked the phone and called me back.
I did not bother answering his email; he knows why I dumped him. He failed at the heart of his profession: relationship with the client. I made it clear to the new planner that I expect to be answered, period. I am now setting up the new account and looking forward to the next correction where I will be ready to feed on investor worries.
Have you ever had a bad experience with your financial planner?
My DIY stock portfolio is overweight in Canadian oil producers for a reason. I believe Oil consumption is on the path of growth for the next decade and I intend to take every advantage possible of it:
Beating the Index:
I enjoyed reading about how you fired your advisor. Based on what I have read on your blog already, you know a heck of a lot more than your advisor knows anyway. Have you ever wandered into the bank and asked the advisors what their credentials are? You would love it. At BEST, they have a CFP certificate, which can be completed academically in less than 6 months (not counting the sales time you have to put in afterward to be “fully certified” as a charlatan—ahem, I mean, mutual fund salesperson) Worse, far more commonly, they’ve taken a 2 week crash course. I always ask–because I’m a bit of a shit in that area. I find it all so funny and ironic.
Anyway, I look forward to reading more of your posts.
Andrew
Mitch,
I’d like to exchange links with you if you’re interested. My webmaster set it up so we could do it if you visit my homepage and go to the links section at the top. Anyway, we could double our readership.
Cheers,
Andrew
Andrew,
You are spot on with the academic formation. I personally know a friend who after his engineering school failed to find a job, he ended up taking that 6 month course, passing the exams and started his financial planner career in a bank. These people have a quickie formation in order to offer us what their bank has put together. They will NEVER care about our money as much as WE will!
I’d love to proceed with exchanging links. I will drop you an email later today.
Nice, I was looking forward to this post all week! I love the picture, too…
I have not needed to fire my planner since so far I have been “my own advisor” like a fellow blogger we know; I recognize the conflict of interest these guys have so I prefer not to deal with them if I don’t have to!
[...] Beating the Index: I Fired My Financial Planner [...]
[...] Last adviser was not and for that he was fired! I am looking forward in handling all my investments by myself. It is a very exciting and rewarding [...]
Way to go. People put up with way too my crap from their advisors! If you could have been a fly on the wall and watched what he was doing while you were leaving him 3 voice messages you probably would have really gone bonkers. Sad to say it probably won’t hurt him much – there are just too many people willing to put up with lousy service.
@DIY, I am pretty sure that man was busy with more profitable clients!
I am very comfy like that, I give my instructions and the new planner executes, that was my condition when I accepted her. All in all I might not even have to see her since my mortgage related transactions can be done over the phone!
You obviously are far more patient with incompetence than I am. It is probably the case that you were neglected only because you are not seen as an insufficiently important client. I told my own story to Jonathan Chevreau, and posted it on my blog–my adviser was far less incompetent and still does a great job for my father-in-law: http://righteousinvestor.wordpress.com/2010/08/16/do-diy-investors-need-financial-advisers/
I read just yesterday that it is a myth that you are better off on your own as an investor: “You can do better by investing on your own. Very few people, including professional money managers, are able to consistently beat the market by investing in individual stocks or other investments. Most investors are better off investing in index funds or mutual funds as part of an overall balanced portfolio.” [from: http://finance.yahoo.com/focus-retirement/article/111411/10-retirement-myths?mod=fidelity-buildingwealth&cat=fidelity_2010_building_wealth ]
But I read about successful DIY investors all the time, especially in the comments at the Globe and Mail financial page. They could just be bragging, but when these DIY investors explain their various approaches, they make sense and you can see how they can do better than if they had an adviser who charges high management fees. The warnings against doing it on your own are probably designed to support the financial industry. They need a piece of the pie. Their own jobs are on the line.
@PWD,
Totally agree with you on the industry part. I just left you a comment on your post mentioning how real estate agents fear losing their easy income just like the finance industry fears losing the cash cow that the average investor is. Build a balanced portfolio of index funds, set it and forget it.
Successful DIY investors exist but they are marginalized because handling your own money is “risky, so they tel everyone!
Hey Mich,
It’s awesome that you’re getting comments on this great post. You already know what I think.
Keep up the great work!
Never had an adviser/planner, but I’m not surprised.
When opening my BMO investorline account I chatted a while with the rep, and realised that I knew more about actual investing than he did, just from reading online for a few months. He was vague on a lot of details – stuff like exchange rates and currency hedging, and basically just wanted to say that everything worked fine, and really, why was I asking so many questions ? (he really said that, after question #3, about American withholding taxes in a TFSA)
He just wanted to push people into a handful of mutual funds and didn’t know much else about investing, though I’m sure he knows how to make money for the bank…
@Paul, Thanks for sharing your experience. This is a very profitable niche for banks so I am sure they don’t like it when you ask too much. They just want you to buy THEIR funds and pay the MER. More than that is too much trouble…