Working with a financial planner
Choosing to work with an investment professional who can provide holistic financial planning is an important decision that will affect all aspects of your financial well-being, today and in the future. Yet in Canada (excluding Quebec), there is no legislated standard in place for those who offer financial planning services. That means that anyone can call themselves a “financial planner” or “financial advisor” – even if they have no qualifications whatsoever.
In the absence of government regulations, you must do your due diligence to ensure you’re dealing with someone who is reputable. All legitimate financial planners or advisors will have some sort of industry-recognized certification. A common, highly regarded and internationally recognized designation is that of Certified Financial Planner (CFP®). Other respected designations include Registered Financial Planner (RFP®), Personal Financial Planner (PFP®), and Chartered Strategic Wealth Professional (CSWP®).
At Vancity, our team of experienced, accredited investment professionals are available to provide you with strategic advice and financial solutions.
Choosing an advisor
In addition to demanding competence and ethics by choosing to work with an investment professional with an accredited professional designation like CFP® or RFP®, here are some tips to help you find the right professional for your needs:
Be prepared
Do some research to become familiar with financial planning terms and strategies. While a good advisor will explain things as you go along, understanding the basics will allow you to be more involved in the process.
Consider your financial and personal goals
Financial planning is about finding the right strategies and taking the appropriate steps to help you meet your life goals. Take the time to reflect on what’s most important to you, both today and for the future.Ask the important questions
- What experience do you have?
Experience is an important consideration in choosing any professional. Ask how long the planner has been in practice, the number and types of organizations with which they have been associated, and how their work experience relates to their current practice. Inquire about what experience the planner has in dealing with similar situations to yours and whether they have any specialized training. - What services do you offer?
The services offered will vary and depend on their credentials, registration, areas or expertise and the organization for which they work. Ideally, your investment professional should have access to a range of experts to ensure you get the advice you require to meet your investment, wealth management, insurance, savings, or debt management objectives. - Can you provide me with a complete range of products?
The services a financial planner offers will vary and depend on their credentials, registration, areas or expertise and the organization for which they work. Ideally, your investment professional should have access to a range of experts to ensure you get the advice you require to meet your investment, wealth management, insurance, savings, or debt management objectives. - What’s your approach to financial planning?
Be sure to work with an investment professional who considers your overall financial goals, values, and attitudes even if they specialize in a specific area such as taxation, estate planning, or investments. As an example, your investment professional’s portfolio recommendations should consider your investment objectives and risk tolerance, but also address your cash flow needs, tax situation, risk management, and estate goals. Ask whether they deal primarily with clients with specific net worth, levels of income, or investable assets, and whether they will help you implement the plan developed for you or refer you to others to do so. - How will I pay for your services?
While the amount you pay will depend on your particular needs, financial planning services are rarely completely “free.” Professionals who offer financial planning services can be compensated in a variety of ways – through a commission on the products sold, a percentage of the assets they manage on your behalf, or by charging you a fee-for-service model. Either way, they should provide you with an explanation of their compensation through an engagement letter that outlines the work to be performed. - Who, besides me, benefits from your recommendations?
Ask the planner – regardless of fee structure – if they have a professional obligation to put your interests ahead of their own. Financial planners with the CFP® or RFP® designation must annually attest to a code of ethics that clearly states that your interests will always come first. - Can I have it in writing?
Ask the planner to provide you with a written engagement letter that details the services that will be provided and other terms of your agreement, and keep this document in your files for future reference.
Go with your gut
Your investment professional should instil in you a sense of confidence. If your gut is telling you that you can trust this person and have confidence in their recommendations, you may have found your planner!