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It's Your Money  

The difference between financial and product advice

Proper financial advice

When seeking guidance on managing money, Canadian investors often encounter two different types of support—financial advice and product advice.

While these terms might sound similar, they represent very different approaches to helping individuals achieve their financial goals and often, it can be hard to distinguish which type of advice is being offered to you.

Understanding the distinction is critical to making informed decisions and securing the advice that truly serves your best interests. When evaluating the advice you are receiving, it is very important to ask questions to determine which one is being offered.

Financial advice: Comprehensive and client-centered

Professional financial advice is a holistic, client-focused service designed to support all aspects of an individual’s financial life. Certified financial planners and Qualified associate financial planners adhere to rigorous professional standards of responsibility set out by FP Canada, the leading professional body for financial planning in the country. These standards ensure that financial planners provide advice that is prudent, appropriate, and aligned with their clients' unique needs and goals.

The process of delivering financial advice begins with a comprehensive understanding of the client’s personal and financial situation. This includes exploring goals such as saving for retirement, reducing debt, or funding a child’s education, as well as considering factors like risk tolerance, lifestyle preferences, and family responsibilities. Based on this in-depth understanding, financial planners create tailored strategies that prioritize the client’s best interests.

For example, a CFP or QAFP will assess whether it makes sense to prioritize paying down high-interest debt over contributing to an RRSP, or if a retiree should adjust their withdrawal strategy to avoid triggering unnecessary taxes. These professionals look at the big picture, helping clients navigate financial complexities with personalized, actionable advice.

Product advice: Transactional and sales-driven

Product advice, on the other hand, is typically centered on selling specific financial products such as stocks, mutual funds, insurance policies, or investment accounts. Unlike financial planners, individuals providing product advice are often remunerated through commissions or sales-based compensation. This creates a fundamental difference in the motivation and approach.

While product advisors can play a useful role in connecting clients with the financial tools they need, their focus is generally narrower and tied to the products they sell. If all you want is to purchase products (such as have someone manage your investment account), that might be OK but you need to know they may not delve deeply into a client’s overall financial situation or explore alternative strategies. Instead, their recommendations may emphasize products that align with their firm’s offerings or generate the highest income for the advisor.

For instance, an advisor who is focused on selling mutual funds may encourage a client to invest in a specific stock or fund without fully assessing whether it aligns with the client’s overall situation and if that money could be better used to pay off debt. This transactional approach can leave clients with solutions that are less effective in the long run and, in some cases, unsuitable for their needs.

Professional standards set by FP Canada

To safeguard Canadian investors, CFPs and QAFPs are required to meet strict professional standards established by FP Canada. These include adhering to a duty of loyalty, objectivity, and integrity, and always acting in the client’s best interest. Recommendations must be supported by a sound rationale, based on the client’s circumstances and objectives, and free from conflicts of interest.

Furthermore, professional financial planners must engage in continuous professional development to maintain their certification, ensuring their knowledge remains up to date with evolving regulations, products, and planning strategies. This rigorous framework holds planners accountable and reinforces their role as trusted advisors who prioritize client well-being over sales.

Why the distinction matters for Canadian investors

For Canadian investors, the difference between financial advice and product advice can have significant implications. Engaging a professional financial planner provides confidence that the advice you receive is impartial, tailored, and designed to enhance your overall financial health. In contrast, relying solely on product-based advice may leave you vulnerable to decisions that prioritize someone else’s income over your own best interests.

When evaluating potential advisors, it’s essential to ask questions about how they are compensated, whether they hold certifications like CFP or QAFP, and the scope of their services.

True financial advice is built on a foundation of trust, transparency and professionalism—qualities that ensure your financial well-being remains the top priority.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.





What will a second Donald Trump presidency mean for your financial portfolio?

Trump's financial impact

As Donald Trump begins his second term as president of the United States, many Canadian consumers and investors are wondering what that could mean for their financial outlook.

Trump’s prior presidency was characterized by unpredictability, bold economic policies and a penchant for trade disputes—all of which, if repeated, could cause some panic north of the border.

While it’s natural to feel apprehensive, history shows that overreacting to political events can often do more harm than good when it comes to investment decisions and managing your overall financial plan. So let’s break it down:

A look back at Trump’s first term

When Trump was first elected in 2016, there were widespread fears about what his policies might mean for the economy and markets. Concerns about his “America First” agenda, threats of tariffs and a volatile trade relationship with China loomed large. Despite those worries, the U.S. economy grew steadily and stock markets—both in the U.S. and Canada—enjoyed strong performance during much of his term. Canadian investors benefited from a robust global market and resilience in key sectors like technology and resources.

However, the first term wasn’t without challenges. Trump’s trade policies, including the renegotiation of NAFTA into the USMCA, did cause temporary turbulence in Canadian markets. Tariffs on aluminum and steel, though eventually resolved, created headaches for some industries. Nevertheless, the broader economic impact was relatively contained and investors who stayed the course generally came out ahead.

What could a second term mean?

With Trump back in the Oval Office, Canadians are asking familiar questions—Will tariffs make a comeback? Could U.S. tax or trade policies negatively affect Canadian businesses? What happens if the U.S. Federal Reserve adopts a more aggressive monetary stance in response to Trump’s economic priorities?

Here are a few key considerations:

1. Trade uncertainty: Trump’s willingness to use tariffs as a negotiating tool remains a wildcard. While Canada-U.S. trade relations under the USMCA have stabilized, the possibility of new disputes cannot be ruled out. For investors, this could mean short-term volatility in sectors like manufacturing, natural resources, and automotive, which are heavily reliant on cross-border trade.

2. Currency fluctuations: Trump’s fiscal policies, such as tax cuts or infrastructure spending, could strengthen the U.S. dollar. A stronger U.S. dollar often weakens the Canadian dollar, which can benefit Canadian exporters but may increase costs for consumers importing U.S. goods.

3. Energy and climate policy: Trump’s support for fossil fuels and deregulation could provide a tailwind for Canada’s oil and gas sector, which has struggled in recent years. However, this could also clash with Canada’s push toward clean energy and sustainability, creating longer-term uncertainty for investors in the green energy space.

Should you change your portfolio?

The short answer is probably not. While Trump’s policies could create market volatility, long-term investors are typically better off sticking to a diversified plan rather than trying to time the market based on political events. Here are some tips:

• Stay diversified: Ensure your portfolio is well-diversified across asset classes, sectors, and geographic regions. This can help cushion against shocks in any one area.

• Focus on quality: In uncertain times, high-quality investments—such as companies with strong balance sheets, reliable earnings, and competitive advantages—tend to hold up better.

• Don’t overreact: It’s tempting to make drastic changes in response to political events, but history shows that markets tend to recover from short-term shocks. For example, despite initial fears in 2016, stock markets performed well under Trump’s first term.

• Review your risk tolerance: If you’re feeling particularly uneasy, take the opportunity to revisit your investment goals and risk tolerance. Small adjustments to your asset allocation may provide peace of mind.

What about tariff threats?

While the prospect of renewed tariffs is concerning, it’s worth noting that Canada and the U.S. have a deeply integrated trade relationship and both sides have incentives to maintain stability. Canadian industries are also more prepared this time around, having navigated similar challenges during Trump’s first term. Investors should keep an eye on sectors that are particularly trade-sensitive but avoid making knee-jerk decisions based on worst-case scenarios.

The bottom line

Donald Trump’s return to the White House may bring a mix of challenges and opportunities for Canadian consumers. While it’s important to stay informed and vigilant, there’s little evidence to suggest that wholesale changes to your financial plan or investment portfolio are necessary. As with any period of uncertainty, staying disciplined, diversified, and focused on your long-term goals is the best course of action. Political headlines may grab attention, but for most investors, sticking to the fundamentals will yield the best results.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



Despite growing concern about personal debt, there is help available

Financial confidence drops

The latest MNP Consumer Debt report was released last week, and it reveals a significant decline in it’s confidence index to 79 points (a 10-point drop from the previous quarter), indicating heightened financial anxiety among Canadians.

The decline is attributed to multiple economic uncertainties, such as proposed tariffs following recent political developments. Notably, 50 per cent of Canadians are now $200 or less away from insolvency, with 35 per cent already insolvent—a nine per cent increase from the last quarter.

That financial strain is evident across various demographics, with women (55 per cent) and men (44 per cent) both experiencing increased vulnerability.

Despite recent interest rate cuts by the Bank of Canada, concerns about personal debt persist. Half of Canadians express apprehension about their ability to repay debts even with declining rates, and 46 per cent fear that rising interest rates could lead them toward bankruptcy. This sentiment underscores the pressing need for effective financial planning to navigate these challenges.

The role of financial planning

Financial planning serves as a crucial tool for individuals facing financial difficulties, regardless of their debt levels or income. Key benefits include:

• Debt management: A structured plan helps prioritize debt repayment, negotiate with creditors, and consolidate debts where appropriate.

• Budgeting: Creating a realistic budget enables individuals to track income and expenses, identify areas to reduce spending, and allocate funds toward savings and debt repayment.

• Emergency fund creation: Setting aside funds for unexpected expenses can prevent reliance on credit, reducing future debt accumulation.

• Goal setting: Establishing short-term and long-term financial goals provides motivation and a clear roadmap for financial stability and growth.

Advantages of working with a certified financial planner

A CFP, as well as qualified associate financial planner, offer expertise that can significantly enhance financial well-being:

• Personalized advice: CFPs and QAFPs assess individual financial situations to provide tailored strategies that align with specific goals and circumstances.

• Comprehensive planning: They consider all aspects of finances, including investments, insurance, taxes, retirement, and estate planning, ensuring a holistic approach.

• Accountability and support: Regular consultations with a CFP or QAFP help individuals stay on track with their financial plans and make informed decisions.

• Ethical standards: CFPs and QAFPs adhere to a strict code of ethics, ensuring clients receive trustworthy and objective advice.

Pro-bono financial planning options

For those unable to afford professional financial planning services, several pro-bono options are available:

• Non-profit organizations: National groups like Credit Counselling Canada, the Canadian Foundation for Financial Planning and the Financial Planning Association of Canada offer free, or low-cost, financial counseling and debt management services.

• Community programs: Many communities provide workshops and seminars on budgeting, debt management, and financial literacy. For example, Launch Okanagan has a number of programs that it runs in-person in the Okanagan area.

• Online resources: Websites, such as the Financial Consumer Agency of Canada, offer tools and information to assist with personal financial planning.

• Educational institutions: Some universities and colleges offer financial planning clinics staffed by students under professional supervision, providing free services to the public.

The recent MNP report highlights a growing financial strain among Canadians, emphasizing the importance of proactive financial planning. Whether through professional guidance from a CFP or QAFP or utilizing available pro-bono resources, individuals can take steps toward financial stability, regardless of their current financial challenges.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.





It is possible to get life insurance at affordable rates after a cancer diagnosis

Life insurance after cancer

Securing life insurance after a cancer diagnosis, or other serious illness, may seem like an impossible task to many Canadians.

The perception, often, is any pre-existing condition will automatically result in denied coverage or prohibitively high premiums. However, that’s not always the case. With proper planning, thorough preparation,and expert guidance, it is possible not only to get approved for life insurance but also to secure coverage at standard rates.

Understanding life insurance underwriting

Life insurance underwriting is a process where insurance companies assess the risk of insuring an individual. Factors such as age, medical history, lifestyle and family health history play a critical role in determining eligibility and premiums. For individuals with a history of cancer or other significant illnesses, underwriters look closely at the details of their condition, treatment, recovery and current health status.

Many people make the mistake of submitting a life insurance application without giving the underwriters a full picture of their situation. That can lead to automatic denials or being categorized as a higher-risk applicant, resulting in higher premiums. The key to overcoming those challenges lies in providing the underwriters with all the information they need to make an informed decision. They are typically very busy and if you want a favourable outcome you can greatly increase your odds by providing extra information at the start instead of hoping they will have time to go back and ask for it.

The importance of packaging additional information

Insurance underwriters rely heavily on medical records and questionnaires but those documents alone may not tell the full story. A successful application for someone with a medical history often involves going beyond the standard forms. That might include:

• Detailed medical records highlighting successful treatments, remission, or recovery.

• Physician statements—A letter from your doctor detailing your health progress and prognosis.

• Lifestyle improvements—Evidence of positive lifestyle changes such as quitting smoking, maintaining a healthy weight, or adopting a regular exercise routine.

• Specialist evaluations—If applicable, a report from an oncologist or other specialists affirming your current health status.

The goal is to demonstrate to the underwriter you are a manageable risk. For instance, someone who was treated for breast cancer five years ago and has been cancer-free since (and provides a report confirming this) is likely to be viewed more favourably than someone who simply submits an application with basic medical records.

Why standard rates are possible

Insurance companies’ perspectives on illnesses like cancer have evolved in recent years. Advances in medical treatments, increased survival rates and better long-term prognoses mean insurers are more willing to offer standard rates to applicants who present a compelling case. Factors that can influence their decision include:

• Time since recovery—Many insurers have a waiting period after treatment before they will consider an application.

• Type and stage of illness—Early-stage cancers or conditions with high recovery rates may be viewed more favourably.

• Comprehensive follow-ups—Regular medical check-ups and evidence of continued good health can strengthen your application.

The role of a certified financial planner

Navigating the complexities of life insurance applications after a serious illness is not something you should do alone, or with someone who is simply licensed to sell products. This is where working with an insurance-licensed certified financial planner becomes invaluable. A CFP can:

• Guide the process—Help you understand what specific documentation and evidence to gather.

• Advocate on your behalf—Present your case to insurance companies in the best possible light.

• Compare options—Work with multiple insurers to find the best policy for your unique situation.

• Provide long-term planning—Ensure your life insurance coverage fits into your broader financial plan.

Choosing the right CFP professional is crucial. Look for someone who specializes in working with individuals who have medical histories and has a track record of securing approvals at standard rates. Their expertise can make the difference between an approval and a denial, or between standard and substandard rates.

Empowering Canadians to protect their families

A history of cancer or another serious illness does not have to be a barrier to securing life insurance and protecting your family. By taking a proactive approach, you can improve your chances of not only getting approved but also obtaining coverage at rates comparable to those without medical challenges.

The key is preparation, persistence and partnering with the right expert. Life insurance is a critical component of financial planning and with the right strategy, it is possible to ensure your loved ones are protected, regardless of your medical history.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



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About the Author

Brett Millard is vice-president and a member of the executive leadership team at FP Canada, the national professional body for the financial planning industry. A not-for-profit organization, FP Canada works in the public interest to foster better financial health for all Canadians by leading the advancement of professional financial planning in Canada. 

He has worked in the financial advice industry for more than 15 years and is designated as a chartered investment manager (CIM) and is a certified financial planner (CFP).

He has written a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges they face in every stage of life. Enhancing the financial literacy of Canadian consumers is a top priority for Brett and his ongoing efforts as a finance writer focus on that initiative. 

Please let Brett know if you have any topics you’d like him to cover in future columns ,or if you’d like a referral to a qualified CFP professional in your area, by emailing him at [email protected].

 



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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