There are many well-qualified, honest and hard-working financial advisors in Canada. Unfortunately, a few bad apples can often taint a profession’s reputation with the general public. Follow these tips and make sure your advisor has the proper qualifications, training and experience.
- Understand your financial goals
Before you choose an advisor, you need to know your personal financial needs and goals. For instance, if you need help with insurance, chose an advisor with the proper license to sell insurance products. If you want to trade equities, make sure your advisor is properly registered with your respective securities regulator. If you want to follow a financial plan, ensure your advisor is properly qualified to offer such advice.
- Check your advisor’s qualifications
One of the most popular designations for financial advisors is the Certified Financial Planner (CFP) designation. CFPs are skilled, experienced and follow standards of conduct that put the client first. The Financial Planning Standards Council (FPSC) offers an online tool to help you find a Certified Financial Planner professional in Canada. You can search by name, location or the financial area you would like your advisor to specialize in. For instance, if you’re looking for help in estate planning, you can narrow your search to those terms.
- Ask questions
Make sure you feel comfortable discussing your finances. Professional advisors should be able to answer questions about what they do for a living. Ask about their education, experience and specialties, how many clients they have and how long they have been an advisor. Find out how they are paid, what kind of products they sell and how they are regulated. Avoid those who cannot give clear and honest answers to basic questions about their background.
- Ask for references
Get contact information for clients who have similar financial backgrounds as yours. Follow up with a brief discussion. Are they happy with their advisor? Does he or she have any weak points? You can also ask about your advisor’s professional networks, as many work closely with lawyers, accountants or insurance agents. These professionals should also be able to provide references.
- Determine Possible Conflicts of Interest
If your advisor also sells investments, understand how they choose products for you. Do they have access to a wide range of investment products? Or are they limited to products sold by their financial institution? Understand the fee structure. The advisor’s fees will differ, depending on the product sold.
- Make Sure Your Advisor Offers Financial Planning
Detailed planning is central to every financial decision a client makes, says Dwayne Rettinger, an Executive Financial Consultant with IG Private Wealth Management. Important financial decisions include making a major purchase, running a business, taking on debt and saving for retirement. Dwayne Rettinger, who holds the CFP designation, says his main job is to ensure his clients’ portfolios are well-managed and that they are not exposed to unnecessary risk.
There’s no doubt that finding a good financial advisor that you trust can be the key to your financial success. Your professional advisor can help you follow all elements of your overall financial plan so that you are comfortable today and in the future.