This article was first published in the National Post on May 22, 2021. It is being republished with permission.

by Tom Bradley

I’m amazed at what investors will put up with. They’ll stick with an adviser or investment manager despite being ignored, talked down to, and/or getting poor returns. Sometimes they’ll even stay when they don’t trust the adviser to act in their best interests.

There are many reasons why these relationships are so sticky, although few of them are good ones — life gets in the way; breaking up is hard to do; and if you leave, you need to find someone else.

I get worked up about this because it’s super important. How well you manage your long-term investments will determine the quality of your life in retirement.

If you’re dragging your feet on this important personnel decision, here are 10 reasons that might prompt you to act. If you can relate to two or more, it’s time to move on.

1. Unprepared — During a portfolio review meeting, it’s clear your adviser hasn’t done an ounce of preparation. He doesn’t remember where you left off last time, what you were concerned about, or that your mother is living with you. You’re forced to bring him along while he pretends to remember.

2. Fee obfuscation — Your adviser squirms, hesitates, and changes the subject when you ask about fees. She should be able to outline quickly and clearly how much you’re paying and what you’re getting for it. You’re definitely paying too much if you’re told, “It doesn’t matter, it’s all about returns.”

3. Mystery returns — As I wrote in January, you receive an annual performance report in the first quarter of each year which contains your official, after-fee return. If your adviser uses numbers that don’t match the report, picks an odd time frame, or talks at length about the last quarter, then it’s likely you’re not getting the straight goods.

4. Performance puffery — Your adviser reminds you of his brilliant decisions when times are good, and blames the market when your portfolio is doing poorly. It’s a common and unflattering trait amongst investment professionals. The reality is, your portfolio is both up and down because of markets.

5. Mistake? What mistake? — Years ago, I had a friend join me for a series of investment manager interviews. When we finished, she said, “They need to form a self-help group. They are in serious denial.” She was referring to the fact that all the managers claimed to have played the tech boom and bust perfectly. None would admit to messing up, even though their records showed otherwise. If your adviser is flawless, she’s probably not a good enough investor for you. Successful investors make plenty of mistakes and are not afraid to talk about them.

6. Hiding under the desk — Your adviser was missing in action when the market melted down last March. I’ve heard too many people say they didn’t hear from their adviser until months later, or not at all. No call, email, webinar or blog post. This is a deal breaker. Turbulent times are when advisers earn their keep.

7. ‘When’ not ‘if’ — The pandemic was not a predictable event, but market meltdowns occur regularly. They’re part of investing. If you aren’t prepared for the next bear market, your adviser isn’t doing his job. As the saying goes, ‘Long term doesn’t matter if you can’t survive the short term.’

8. Eye on the prize — Your adviser isn’t linking her strategy to the purpose of the money. Investing is an endurance race. Your goals are long-term. Your adviser needs to keep you focused on the prize, especially in today’s world of media overload.

9. The most important thing — Your adviser doesn’t talk about asset mix, diversification, and portfolio construction. It’s fun to pick stocks and funds, or execute an options strategy, but when it comes to controlling risk and return, asset allocation is the biggest dial you have on your investment dashboard.

10. Wet noodle — Your adviser tells you what you want to hear. It’s great to have a cordial relationship, but you don’t want a “yes” person. An adviser who flops around and never pushes back is doing you a disservice. You need someone who is willing to tell you what you don’t want to hear: it’s time to trim your favourite stock; gold shouldn’t be a third of your portfolio; or ‘it’s going up’ isn’t a good enough reason to buy.

And the clincher. You’ll know you made the right decision to change if your adviser questions your judgment, speaks poorly of the firm you’re going to, and/or is slow transferring the money.