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Investing is 'a very individual process and that's why you need someone who understands you,' says Sheryl Purdy, an adviser with Leede Financial Markets in Calgary

(Left) Investing is 'a very individual process and that's why you need someone who understands you,' says Sheryl Purdy, an adviser with Leede Financial Markets in Calgary.


(Right) Gail Bebee, author of 'No Hype: The Straight Goods on Investing Your Money,' says anyone can manage their own finances if they have the inclination and the talent.



Do it yourself - or not?

Many experts see the state of worldwide markets as a rare opportunity to find deals in other countries

John Heinzl

Taking control of your investments has never been easier, thanks to the proliferation of information on the Internet and the growing assortment of free research tools made available by discount brokers.

By looking after your own portfolio you'll save on commissions and develop a better understanding of the world of finance as you invest for your future.

But do you have what it takes to be a self-directed investor? Or are you the type who would be better off turning over your finances to a professional?

We asked Gail Bebee, Toronto-based author of No Hype: The Straight Goods on Investing Your Money, to talk about the benefits of self-directed investing and provide some tips for people just getting started.

In the interest of sparking a debate, we also invited Sheryl Purdy, an investment adviser with Leede Financial Markets in Calgary, to talk about the benefits of hiring a professional to manage your money.

Financial savvy

John Heinzl: Gail, why would anyone want to become a self-directed investor, particularly during volatile markets like we've been experiencing?

Gail Bebee: A few reasons. First, you're in control of your money, so your best interests are number one. Second, lower costs and potentially better returns are possible. And there's more choice [of investments] if you're signed up with a discount broker than if your financial adviser is with a bank, where pretty well all you get are mutual funds.

JH: What sort of preparation does someone need before they start managing their own investments?

GB: You've got to be an informed investor and do your homework and do lots of reading. Read the newspaper, maybe join an investment club, consider taking a basic investing course. The other thing to do is start small. Don't go and decide to invest all your money. Maybe you want to do some mock investing to try it out.

JH: Sheryl, what is it that makes an investor want to turn their finances over to a professional?

Sheryl Purdy: Investing can be very lonely, and people tend to second guess if they're making the right decision, and that's when they bring in a professional.

One of the things that's also very important is to understand what [the client's] timeline needs are, if they're looking for income or growth, what their risk tolerance is. It's a very individual process and that's why you need someone who understands you.

JH: Gail, do you agree that certain people shouldn't try to manage their own money?

GB: I totally disagree. If you've got the inclination and the talent, go ahead, because in most cases you'll be better off. I'm doing what I'm doing now because I had really bad experiences with two different investment advisers. Sheryl may be a good investment adviser. It sounds as if she's taking care of her clients. But there are a lot of bad investment advisers out there.

Investment adviser is a very loosely-goosey term. There are people who are really well-qualified and do a good job for their clients, but there are people who have taken a mutual funds course and they put their shingle up and they call themselves a financial adviser and they're really not interested in taking care of people, they're interested in collecting trailer fees on mutual funds.

JH: Sheryl, let's face it, some clients have bad experiences with advisers. Their accounts get churned, or they end up in investments that are totally inappropriate. What is your advice to someone who wants to find an adviser they can trust?

SP: There are a few things here that I think are really important. Talk to people who are already working with a full-service broker. Find out why they like working with this person.

Call the broker and book a time to go meet with them. See if their style and personality is a fit for your own and don't be afraid to ask questions. A good broker would welcome them. Working with a full-service broker is a relationship. You need to enjoy talking to them, have your needs met, questions answered and understand clearly what and why you are making the investment choices you make.

GB: Well, you know, I certainly didn't have that kind of experience. The other thing about [many investment advisers] is they're not interested in clients with small amounts of money.

SP: Oh, I'm going to take the complete opposite position [to that].

GB: Well, I have to tell you the ones I've talked to . generally they want a couple of hundred thousand dollars or they're not that interested.

SP: No. no.

JH: So Sheryl, if I came to you with $5,000 would you sit down with me?

SP: I would welcome it, absolutely. Because you need to start someplace. My attitude is it's a long-term relationship and you just never know what's going to be around the corner. My feeling is that each individual client deserves my service and that I have something to offer them, and that by growing with them eventually they will - if it's appropriate for them - they'll bring more money.

JH: Gail, any closing advice?

GB: If you can tell everybody to learn the investing basics - whether they end up going with a financial adviser or not - I think that would be a great service to your readers.

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