Here we are in the season that is supposedly summer. Hopefully everyone is enjoying their holidays.
A couple ‘events’ that my clients have experienced highlight the importance of keeping up with paper correspondence. I can see you all rolling your eyes equating ‘paper’ with ‘dinosaur era’.
Paper correspondence in the financial industry is issued for regulatory reasons. Regulations exist for the client’s protection as an investor. You will see why this is important later on.
Here are examples that highlight the importance of due diligence on your part as a responsible financial citizen.
When I say that a request for an address change needs your signature it is not because I am picky and obsessed with details. The Mutual Funds Dealers Association(MFDA) has instituted that safeguard for your protection. Therefore a quick meeting for your signature on a form needs to get to the top of your ‘to do’ list. I do not enjoy playing telephone tag for long. Procrastination results in me receiving endless paper notices about the client’s wrong outdated address. More importantly, procrastination may expose the client to identity theft when mail goes unclaimed at the former residence.
I had a greater than normal number of requests for duplicate RRSP receipts. Part of this is related to what I discussed above. Again, important tax documents need to be tracked. Often one of the RRSP receipts is included in the year end statement. Many clients often file their statements or may not bother to open this important mail.
One of my clients recently discovered unauthorized purchases on his credit card statement. These incidents had gone unnoticed for a few months because he was not using the card. As a result he saw no need to check his paper statement.
While reviewing stats on the recent market downturn and recovery, a client made the observation that all the graphs and numbers did not reflect the human pain of job loss and financial insecurity. From that comment we can conclude: Any negative financial event can be dealt with more effectively if the client is prepared. Live WITHIN your means not UP TO or BEYOND your means. Have a rainy day account. Regard debt as something to pay down not pile up. Keep your wants in realistic perspective. I know, I know, you all think I am from the dinosaur era.
The stock market and economy advance as giant machines because human nature rarely changes. Many people need and want the same things. We may differ on which chocolate bars we like but we both want and buy them. Or you may like a foreign car but I like a domestic. It is for this reason that the stock market and economy move upwards albeit not smoothly.
Still I am aware of the emotional pain behind the statistics, as my family has gone through it as well.
I have been a financial planner long enough to know potentially fraudulent activity even if I am given very little information. Call it a business sixth sense. How can unlicensed unregulated activity be detected? By asking questions and checking.
Anyone who wants to handle money on behalf of others MUST be licensed. If people involved in these activities promise and or claim high profits but there is no paper trail or PROOF then it is an empty promise. Ask for a track record and registration. Be wary of people that charge excessive fees or commissions. Above all, as I mentioned already, keep wants in a realistic perspective. These type of people take advantage of human nature’s desire for materialistic things.
Recent scandals both in the both in Canada and the US have focused on high profile incidents of fraudulent activities.
In the case of the so called ‘advisor’ in Quebec, he had no licenses nor was he registered, therefore no governing body could supervise his ‘trading activity’ which went unnoticed for many years. Yet some of the blame can be assigned to the investors who did no due diligence. It was reported that only after the fact did the victims realize they had stopped receiving paper statements. So those hated paper statements serve a purpose after all eh? It shows you that I am the real deal!
At this point, my street cred or qualifications bear repeating so you will know your trust and confidence in me is well founded.
My sponsoring companies and I are governed by the Alberta Securities Commission, the Mutual Funds Dealers Association(MFDA), and the Alberta Insurance Council. We must adhere to their policies and regulations or face sanctions and penalties.
As both an insurance agent and a Certified Financial Planner(CFP) I must do mandatory continuing education on a yearly basis. As a CFP I must also follow their code of ethics. The CFP designation is only awarded after successful completion of six courses and exams and the comprehensive final exam. In the year I wrote the exam the pass rate was less than 50%.
Questions and comments are always welcome.