The first in a seven-part series designed to clarify some common misconceptions about the investment industry.
As a boy growing up on a farm in rural Saskatchewan, a lot of sales representatives would show up at our door selling everything from life insurance and vacuum cleaners to encyclopaedias. No matter who showed up, these sales reps had a certain determination to make the sale whether it was a correct fit for our family or not. The sales representative’s livelihood most often depended on making the sale. The first casualty of salesmanship is, almost always, the truth. In the interest of truth and transparency we offer you this series designed to clarify some common misconceptions about the investment industry.
It is my experience that most financial professionals are hardworking, ethical people who truly want to help. With over 70,000 hours in financial services I have seen many more good people than bad. Avoiding the bad apples is important. Knowledge is power and as such I hope that this issue gives you some insight about the difference between who sells what and why.
The Banker is a person hired by a bank or a credit union that is licenced to sell certain investment products but are not licenced to give advice.
The Life Insurance Agent can sell segregated mutual funds and usually mutual funds as well.
The Mutual Fund Representative is not different than the life insurance agent. Training usually requires a licence to sell mutual funds along with mandatory ongoing annual education requirements.
The Banker, Life Insurance Agent and Mutual Representative are usually licensed with the basic training and sell products that they are comfortable with. They rely on third party money managers and acted as a liaison between the money manager and the investor.
The Broker has additional training and licensing as he/she can buy and sell many more products than just GICs and mutual funds. They can offer almost any product available and, as such, most brokers try and specialize into two or three areas. Stockbrokers are typically regulated professionals, often associated with a brokerage firm or dealer, who buy and sell stocks and other securities for clients in return for a fee or commission.
The Wealth Advisor is an individual that has an investment philosophy, a defined plan or strategy and most importantly, a process to help produce returns and protect capital. All of this is done for the clients they service. They look at more than just performance and pricing, but review all aspects of your financial situation. They discuss with you what your goals are such as planning for retirement or selling a small business.
Knowledge is power: Look out for our next issue covering fees and hidden charges
At Cooper Schneider Financial, we believe it is important for all our clients to be informed and educated about the specifics of what they are buying and why they are buying it. Our next bulletin will talk about fees on various mutual funds and GICs. For further clarification, please contact us.