1. Of note is the quite thorough Guide to Investing: How to work with your investment advisor.

2. Also of interest is a useful list of questions to ask prospective advisors, put together by the Canadian Securities Administrators. Here are the questions (see document for more details):

1 Are you registered with a securities regulator? Securities regulators will only register firms and individuals if they are properly qualified. Is your firm backed by an investor protection fund such as the Canadian Investor Protection Fund?

2 What is your background? Make sure they are qualified and have the right experience to give you the help you need.

3. How much do you cost and how do you get paid — salary, commission, a flat fee, or a combination

4. What kinds of products and services do you offer? Not all advisers offer the same products and services.

5. Who are your clients? It will help if the adviser has a good track record with clients who have similar backgrounds as you (and ask for references from long-time clients).

6.  How will you help me reach my goals i.e. safety, income, of growth?

7.  What level of service can I expect from you?

Blogger Canadian Capitalist took Mr. Mandelman to task on this point in his July 22 post; what CC said also seems applicable to Mr. West’s thesis. And as the creators of MoneySense’s Couch Potato Portfolio have said all along, buying and holding broadly based index funds and/or exchange-traded funds takes “only 15 minutes a year” and “will beat “about 80% of the money managed by professionals.”

How so? Markets are efficient. So financial managers and advisors are able to deliver no better than the market average over time. But after deducting their fees, they will underperform the market by 1.5% to 2.5% a year. Simply holding an index fund will yield the market average at a lower cost, between 0.3% and 0.6% a year. Over the long run, keeping fees low adds up big time.

Some of the best index funds in terms of cost, as CC has noted, are the TD eFund family. Blogger wheredoesallmymoneygo.com also recommends the DFA family of index funds. Providers of exchange-traded funds in Canada include iShares and Claymore Investments.