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You might think that hiring the same financial advisor that your parents have worked with for years would make sense, but …

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Just because your parents did something a certain way and took a specific approach, doesn’t mean it’s right for you | Photo: Jewishaction.com

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Immigrant families who came to North America, whether pre-war or post-war, often came with almost nothing to their name. Through hard work and a constant focus on creating a better life for the next generation, many of these families went on to build not only the essentials, but also significant wealth. The methods of investing and managing their money often simply involved bank deposits and Canada Savings Bonds, for interest rates that were much higher than they are now.

Today, there are myriad products, investments, and avenues. An increasingly complex financial landscape has led many to retain the services of financial advisors to help them navigate their options. As boomers step back and wealth is transferred to the next generation, our progeny is tasked with deciding who they will choose to advise them.

You might think that hiring the same financial advisor that your parents have worked with for years would make sense. After all, the advisor knows your family and has been trusted by your parents (not to mention cousins, aunts, and family friends) for years. However, there are multiple reasons why this may be a bad idea. Granted, these are sweeping generalizations that don’t apply to every advisor, but in my 20 years of experience in the industry, I’ve found they apply far more often than not.

1. They simply aren’t engaged anymore: As advisors progress in their career, they often delegate some (or all) of the responsibilities to their juniors or associates. The advisor becomes more of a relationship manager than a financial advisor, spending an increasing amount of time on the golf course and less time in the office. This means that the person your parents hired and worked with isn’t doing the research and advising anymore.

2. They don’t keep up with new trends, technologies and opportunities: Most advisors have done things a certain way forever, and they believe that’s what works. While it may have been the best path at one time, the world and markets are always changing. Advisors need to be constantly educating themselves as to what’s happening now—not just relying on what worked 30 years ago. It’s hard to teach an old dog new tricks; sometimes, a new approach is required.

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3. You aren’t your parents: Just because your parents did something a certain way and took a specific approach, doesn’t mean it’s right for you. You have your own needs and life path, and it might differ dramatically from theirs. Their advisor might be set in their ways and assume that you need what your parents did. Ensure your advisor is really advising you based on who you are.

Experience has value, no doubt. Having lived through – and helped clients manage – many market cycles can help an advisor maintain perspective and avoid repeating mistakes. A newer advisor who is going through a market crash for the first time may not have the insight that a more seasoned advisor has, so one should not necessarily count older advisors out. The key is to make sure that the advisor isn’t afflicted by the three issues outlined above.

Investors should take the time to really get to know an advisor (and themselves) before choosing to work with one. Don’t be afraid to chart your own course, and don’t take it as given that someone who advised the previous generation is still the right choice today.

While it’s certainly possible for them to be, the best option for you may be someone younger who’s actively growing their practice, or it may be someone older with a multi-decade track record. The most important thing is to find an advisor who shares your values and beliefs and whom you can see yourself working with for many years.

Jesse Kaufman CAIA, AIF, CIM, FCSI

The founder of AdviceCheck, which he started to help investors determine if their financial advisors are doing a good job for them. In 2017, he was named Best Advisor in the Country for Alternative Investment Expertise at the Canadian Wealth Professional Awards.

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Thank you for choosing TheJ.Ca as your source for Canadian Jewish News.

We do news differently!

Our positioning as a Zionist News Media platform sets us apart from the rest. While other Canadian Jewish media are advocating increasingly biased progressive political and social agendas, TheJ.Ca is providing more and more readers with a welcome alternative and an ideological home.

We revealed the incursion of anti-Israel progressive elements such as IfNotNow into our communities. We have exposed the distorted hateful agenda of the “progressive” left political radicals who brought Linda Sarsour to our cities, and we were first to report on many disturbing incidents of Nazi-based hate towards Jews across Canada.

But we can’t do it alone. We need your HELP!

Our ability to thrive and grow in 2020 and beyond depends on the generosity of committed readers and supporters like you.

Monthly support is a great way to help us sustain our operations. We greatly appreciate any contributions you can make to support Jewish Journalism.

We thank you for your ongoing support.

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