According to the latest Investor Index from the Canadian Securities Administrators (CSA), 61 per cent of Canadian investors used an advisor in 2024.

It’s the lowest point since tracking began as more do-it-yourself investment options open up.

Qualified advisors most often prove their worth by enhancing portfolio returns and lowering risk over time, but some are just plain bad.

If you think you have a bad advisor, here are five warning signs that could mean it’s time to find another advisor or go it alone.

Returns don’t jive with broader markets

Major stock markets have topped new highs despite the threat of an ongoing trade war and have been climbing over the past few years.

A properly diversified investment portfolio spread out among sectors, geographic regions and risk levels should reflect that.

If your portfolio is posting losses or lackluster returns, there’s probably something wrong with the way it is managed. A properly managed portfolio will follow broader markets when they are up and stem losses when they are down.

Most diversified portfolios have a few duds, but the winners should far outnumber them.

High fees are eating into returns

The reason your portfolio is underperforming the broader markets could also be the result of high fees, and the biggest culprits are usually mutual funds.

There’s an old saying in the investment industry: mutual fund is not bought, they are sold. For many retail investors, mutual funds are the only way to get professional management and diversification. For many advisors they are a way to get rich commissions from mutual fund providers who often charge over 2.5 per cent on the amount invested each year.

Many mutual funds are worth their fees, but good advisors should be directing you to lower-cost exchange traded funds (ETFs) or stocks that trade directly on the stock market as your portfolio grows.

Your advisor is AWOL

Do you only hear from your advisor when RRSP season rolls around, and they want your cash? Portfolio management is a year-long event and regular communication is essential especially during market moving events.

Your advisor should be in touch with you by phone or email, or at the very least a weekly or monthly newsletter to all their clients explaining the situation and assuring you your investments are well positioned for what comes next.

Your advisor isn’t listening

A good advisor should know your retirement goals, tolerance for risk and personal circumstances that impact your finances.

To formulate a proper plan, they should also know your big financial picture; debt levels, home equity, workplace pension plans and other major assets and liabilities.

They should also ask about more personal matters like your family health history to help determine life expectancy.

Communication is a two-way street, however, and it’s important to keep your advisor informed about major life changes.

High taxes are eating into returns

Part of an advisor’s job is to ensure your savings are invested in a tax efficient way. Lowering your tax bill is a risk-free way to boost returns. The amount you save in taxes should remain invested, grow, and compound over time.

If too much money is in a registered retirement savings plan (RRSP), for example, investments could grow to a point where withdrawals will be fully taxed at a high marginal rate. Eventually, minimum withdrawals will be mandatory, putting government benefits like old age security (OAS) in jeopardy.

A good advisor should channel savings into more tax-efficient vehicles well before it gets to that point such as a tax-free savings account (TFSA), income splitting strategies like spousal RRSPs, and even nonregistered investment accounts.