Advisor profile: Educating clients and advisors

As chairman of the board of directors of the Institut québécois de

planification financière (IQPF) for 2012-13, Giroux’s expertise extends to an audience well beyond his colleagues at BMO.

“I provide training,” he says, “by delivering presentations, approved for continuing education, on life insurance and financial planning topics.”

That training is grounded in Giroux’s unique perspective. He

understands the financial services sector, locally and globally, both from the client’s point of view and from the advisor’s.

Giroux started his career in 1990 with Industrial Alliance Insurance and Financial Services Inc. in Quebec City. Six years later, he moved to Standard Life Assurance Co. of Canada in Montreal. That company subsequently sent him to work in Edinburgh for two years, then on to Paris to open an office there. In Europe, Giroux travelled in a much different and much more regulated environment.

“The lesson I took home,” he says, “is that if companies and advisors do not regulate themselves, then the government will do it and they might not take into consideration how the business is run. Advisors need to identify a high standard for themselves.”

Working in Europe was both an adventure and a learning experience for Giroux. It also was temporary. “I saw that [opportunity] as winning the lottery,” Giroux says. “But I knew the rest of my career was likely to be in Canada.”

Armed with that experience, Giroux returned to his native province to help clients and colleagues navigate the rapidly changing financial services landscape.

“The job today,” he says, “involves knowing a lot of information in different areas. It’s very challenging. The average client today is much more complex than the average client 20 years ago.”

Giroux points to demographic shifts, such as the increase in blended families and lifestyle changes that include owning property outside Canada. The influx of immigrants also is raising issues. For example, there are 100,000 people living in Quebec who originally are from France and might inherit property from family still in that country.

Clients will turn to you for information on this growing range of issues. Inheritance, in particular, is a hot topic. But financial planners can’t possibly have all the answers, Giroux warns: “You need to be up front about the information you can provide.”

Advisors, he stresses, cannot be

all things to all clients. It’s critical to be forthright about both what you can offer as an advisor and what is outside your area of expertise.

Clients also need to revise their expectations about portfolio returns. “The double-digit years are long gone,” Giroux says. “More and more clients understand this. But they don’t necessarily understand risk.”

So, it is imperative that you help your clients learn about risk to help ensure that your clients have a realistic understanding of how their investments may perform. Says Giroux: “Financial planners have to be educators.”

For Giroux, a Quebec City native, education goes beyond the client base. Giroux, who joined the IQPF board in 1998 and went on to serve as chairman for the governance and education committees, also is actively involved with Young Achievers, a youth-led organization that supports young people who have made outstanding contributions in volunteering.

“We get to talk to young people about money,” Giroux says. “Then, they create a budget. We let them dream. Then, we put numbers on those dreams. It’s a window into reality.”

The exercise opens with a common, much anticipated scenario: participants are told they will be moving out of their parents’ homes tomorrow and living on their own; they need to determine where they want to live and how they’ll pay for that new life. Says Giroux: “They’re quite keen on the exercise.”

The imaginary experience is grounded in reality. Participants must clip ads for rental accommodations from the local newspaper, determine the actual cost of public transportation and the prices of cars for those who want to own a vehicle. Then comes the million-dollar question: how will you pay for all this?

The answer involves getting a job. All participants are randomly assigned a career, anything from delivering newspapers to engineering.

“Then, they develop a budget to live within their means,” Giroux says, adding that the exercise “also reinforces the need for education and a good job.”

According to a survey conducted last year by the Investor Education Fund, a non-profit organization founded by the Ontario Securities Commission, there is a need for greater financial literacy among youth. By the time Ontario’s teens finish high school, the survey found, they may not have the money-management skills they need for life after graduation. Only 40% of survey respondents felt they were prepared to manage their personal finances.

“Financial literacy is an area of great concern,” says Giroux. “Young people are scared of what lies ahead.”

Youth also are often unrealistic regarding how they will address future financial challenges, Giroux adds: “They think they’ll win the lottery or be a pro football player. They need a reality check.”

That need is not restricted to young people. Many clients also need to improve their financial literacy. In fact, that is the first of eight principles established by the IQPF in setting its standards for the conduct of financial planners. The IQPF’s “Client’s Interest” principle states clearly that the role of the financial planner is to “guide and inform the customer by objective professional judgment.”

That role requires professional financial planners to stay abreast of changes in the market, in the legal landscape and in the regulatory sphere. Says Giroux: “That can be very demanding.”

Giroux also knows how to put the demands of the day behind him. He’s an avid salmon fisherman and a runner. When the ice has melted and the salmon are moving, you can find Giroux by one of Quebec’s many rivers reeling in his catch.

You usually can find him releasing that catch as well: “I like to keep one [fish] at the beginning of the season, so I can have a meal with my children.”

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