It's Your Money  

What to think about when picking a financial planner

Finding financial advice

In the complex and ever-changing landscape of personal finance, navigating the intricacies of investments, retirement planning, taxes, estate planning and wealth management can be a daunting task.

This is where a skilled and trustworthy financial planner comes into play. A financial planner acts as your compass, helping you navigate the financial journey and chart a course towards your long-term goals. However, selecting the right financial planner requires careful consideration and research as many promise far more than they actually deliver.

Let’s take a look at the steps you should take to pick the right financial planner:

1. Define your goals and needs— Before embarking on your search for a financial planner, it's imperative to have a clear understanding of your financial goals and needs. Are you seeking assistance with retirement planning, investment strategies, debt management, or a combination of these? Defining your objectives will help you narrow down your search and find a financial planner who specializes in the areas most relevant to you.

2. Credentials and qualifications—When evaluating potential financial planners, pay close attention to their credentials and qualifications. Look for Certified Financial Planner (CFP) certification, which is the global “gold standard” of planner qualifications. This designation, along with Qualified Associate Financial Planner (QAFP) also issued by FP Canada, indicates the planner has undergone rigorous training and has met strict ethical and professional standards. Don’t be fooled by the myriad of other “planner” designations out there that can often be completed in a weekend.

3. Experience and track record—Experience is a crucial factor when choosing a financial planner. Inquire about their years of practice in the industry and ask for references or client testimonials. A seasoned financial planner is more likely to have encountered a wide range of financial scenarios and can provide insights tailored to your specific situation.

4. Fee structure—Understanding the financial planner's fee structure is essential to avoid surprises down the road. Financial planners typically charge fees in one of three ways—fee-only, fee-based or commission-based. Fee-only planners charge a transparent fee for their services, ensuring unbiased advice. Fee-based planners may charge a fee, while also earning commissions on certain products they recommend. Commission-based planners earn a commission from financial products they sell. Choose a fee structure that aligns with your preferences and ensures that potential conflicts of interest are minimized.

5. Communication and compatibility—Effective communication is key to a successful partnership with your financial planner. During your initial meetings, assess their ability to explain complex financial concepts in a clear and understandable manner. Additionally, consider whether your personalities and communication styles align. A good rapport and compatibility will facilitate a smoother and more productive working relationship.

6. Services offered—Different financial planners offer varying services, from comprehensive financial planning to specialized advice on specific areas. Clarify what services each planner provides and whether they can address your unique needs. Some planners may offer investment management, tax planning, estate planning, or retirement planning, while others may have a broader scope. The services being offered should be spelled out in an engagement letter.

7. Technology and tools—In today's digital age, technology plays a significant role in financial planning. Inquire about the tools, software, and platforms the financial planner uses to track and manage your financial progress. A planner who embraces technology can provide you with up-to-date insights and a more streamlined experience.

Choosing the right financial planner is a critical step towards achieving your financial goals and providing comfort and security for you and your loved ones. A skilled and trustworthy planner can make a substantial difference in your financial journey, guiding you toward a more secure and prosperous future.

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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