One of the best parts of being a Portfolio Manager is building and maintaining a trust relationship with our clients.
Clients are handing over a lifetime of hard earning savings for us to manage prudently. They are trusting us to guide them through the good times and the bad. Ensuring a level-headed approach, and avoiding irrational emotional responses, is what our clients are seeking from us.
Hiring a Portfolio Manager doesn’t prevent the markets going through upward and downward cycles; however, we are equipped to help in how you react to volatility. A Portfolio Manager that you trust can assist you in meeting your financial goals.
Trust does not come instantaneously; instead it is a two-sided process that results from the consistent commitment and open communication of both parties over time to grow and maintain the relationship.
Each relationship has not only mutual trust, but it also has responsibilities unique to each member. A Portfolio Manager is hired to share his or her investing knowledge with you, develop your unique financial plan, update you on your portfolio’s performance, notify you of potential opportunities, answer questions, and refer you to other professionals — such as a lawyer or an accountant — when necessary.
A Portfolio Manager has a fiduciary responsibility to place their clients’ interests before their employer’s and their own interest.
The Portfolio Manager is not the only member of this relationship with responsibilities. You, as the investor, are required to be clear and honest about your investment objectives, risk tolerance and financial situation. You should keep the Portfolio Manager aware of any changes to your current situation, life events, cash flow needs, and preferences. Staying current with the details of your Total Wealth Plan, form realistic expectations, and give constructive feedback to the Portfolio Manager.
By staying proactive in these categories, your Portfolio Manager will be able to further cater towards your particular financial needs and you can be confident in knowing that the Portfolio Manager will be able to take as much information as possible into account when creating your personalized financial plan, managing your portfolio, and constantly improving their service offering.
Trust in a relationship can be broken down into several different components:
Integrity: The confidence that the other member of the relationship is acting ethically and protecting your best interests by upholding all related laws and procedures,
Competency: Assessing the other party’s qualifications to find a fit with an individual that has the skill and knowledge base required to manage your unique situation. For example, you may benefit from finding a Portfolio Manager if you are frequently out of the country or hard to reach.
Empathy: Finding someone that you are able to level with, ask questions to, and whose character suits your own may help increase your confidence that your best interests will be placed above all else.
Reliability: If someone does exactly what they said they were going to do on time, that will help foster your trust in them, so look for someone who is reliable since consistency in someone’s actions and words is a reassuring sign that you can trust them.
It is important to have total confidence in the Portfolio Manager that you work with. You must feel that they will act with integrity on your behalf, is competent in their field, has a personality compatible with your own, and whose actions are consistent with what they say.
When searching for a Portfolio Manager, it can be hard to start a trusting relationship without these things previously established. When researching Portfolio Managers we encourage visiting the team’s websites, determining years of experience, and team size will be a reflection of the service offering. Portfolio Managers are registered under the (CIRO) and can be searched on that website.
When you key in first and last names in the search fields, the name of the individual will show up below, along with a list of firms the advisor has worked for and whether they are currently approved in some capacity. This first screen does not show whether the individual is registered as a Portfolio Manager.
But it does show some interesting information about how many different firms the registrant has worked at since they started recording this information. For example, if a registrant has only been at one firm for their entire career, then only one current firm will be listed. If a registrant has moved to four different firms, then four firms will be listed.
Once you click on the name, the Advisor Report search will help you determine if the person you are researching has the approval category “Portfolio Manager.” You will find this under the CIRO Approval Categories. For example, if the Approval category lists “Registered Representative” then this advisor is not a Portfolio Manager. This individual must verbally confirm each recommendation with the client and does not have the same fiduciary responsibilities as a Portfolio Manager.
Another nice part of the Advisor Report is that you can search to see if the Portfolio Manager or Registered Representative has a clean compliance record with the regulators. The National Registration Database (NRD) was founded in March 2003. Employment information and compliance records prior to this date likely will not be on the Advisor Report.
A good starting point in finding a Portfolio Manager is to ask for referrals from friends, family, or other professionals.
Getting a referral from someone you trust can help you feel a stronger connection with a Portfolio Manager from the very first meeting. The individual making the referral already believes the individual to be credible and their trust has grown out of respect for their advisor’s hard work.
When you make a referral, you are putting your own trustworthiness at stake; therefore, if someone refers a Portfolio Manager to you, they trust the Portfolio Manager with their own assets and have confidence that the Portfolio Manager will be reliable and act with the same integrity, competency, and empathy when managing your assets.
Kevin Greenard CPA CA FMA CFP CIM is a Senior Wealth Advisor and Portfolio Manager, Wealth Management with The Greenard Group at Scotia Wealth Management in Victoria. His column appears every week at timescolonist.com. Call 250.389.2138, email [email protected], or visit .
