Is a financial planner right for me?



There are many things to consider when looking for a professional who can help you meet your goals. I’m sure it can seem overwhelming, especially when you consider that a relationship with a financial planner or advisor is, at its best, a journey. It’s one that can start with a current goal — a new home, a wedding or retirement — but can grow and change as our lives do. And a good financial partner on this journey will encourage you to revisit your plan, help ensure you’re on track and can even give you a nudge when you need it most. If you’re actively looking for some financial advice, good for you: I think sometimes that can be the most important first step. As for some questions you can ask, here are five that I think can help you get a sense of whether the financial planner is right for you.

1. What are your credentials?

There’s no shortage of money experts out there. Some go by “advisor” or “financial planner” or even “your neighbour, Alex” (who always seems to have a nice car in their garage). The reality is almost anyone in Canada can call themselves a financial planner. Only Quebec requires that individuals hold their Certified Financial Planner (CFP) designation before they can use that title. There are certainly other designations that a planner or advisor may hold — Chartered Financial Analyst (CFA), Personal Financial Planner (PFP) among them — but I can say the CFP is one of the more common certifications in the industry. I look at it as a signal the person you’re working with has been specifically trained to build financial plans, and has a good understanding of taxes, estate planning and other issues related to your family’s financial needs. Whoever you meet with,don’t feel shy to ask for their credentials. If they can’t answer in a way that gives you confidence that their advice comes from training received from a trusted professional organization, it may be a red flag.

2. How long have you been in business?

This is a key question people should ask, along with how many clients they have, but the answer you wish to hear may depend on what you’re looking for. You might prefer to work with someone you can relate to, who thinks like you, has similar life experience to you, and has the training and accreditation to help you. Some of us will put a premium on experience, while others may put a premium on knowledge and relatability.

3. How do you get paid?

Not only is this an important question, I think many good planners will raise this issue up front. In Canada, planners and advisors can be paid in a number of ways, but two very common ones are commission-based and fee-based. If it’s commission-based, your planner will receive compensation from the products you buy. You won’t actually pay directly for the services they provide, and while that’s been the status-quo in financial planning for many years, some find it challenging to calculate the full amount they’re paying monthly or annually. In a fee-based arrangement, you would pay a total amount based on the value of assets being managed. It can provide some transparency and a direct line of sight to exactly what you are paying for the services provided. Regardless of how a planner gets paid, they should be able to say, “This is how I’m compensated, this is how and where you will find it on your statements, and this is what you will receive in exchange.”

4. What services do you offer?

This goes hand-in-hand with any discussion of fees: What are you getting for your money? For me the value of working with a planner or advisor is rarely about beating a benchmark or index. It’s about helping you to make decisions and connecting you with the tools and resources that will best help you reach your goals. At its best, I think a planner should be able to advise you on each of the four major areas of your financial plan: building your net worth, implementing tax-efficient strategies, helping you protect what matters and leaving a legacy for future generations. That may mean your planner is trained to help you deal with business issues or estate and tax planning, or they can provide access to people who do. Either way, you should ask what’s on offer and available to you.

5. How often will I hear from you?

Your ability to understand the plan you’ve set out, stick to it and adjust when necessary will be key to your success. But each of us is unique, and each of us may have different needs in terms of communication. Some may panic every time the market drops or international tensions arise and may appreciate a call or a note from their planner or advisor. Others are fine with a regularly scheduled check-in. At the very least, I would look for a commitment to get an annual progress review to make sure any plan remains relevant and are on-track to meet your established goals.

These are five questions that I’d want to know the answers to. The reality is, the answers you’re looking for will be based on your personality and your needs. Above all else, you can look for someone who will give you confidence that they’re going to join you in rolling up their sleeves to draft an action plan and help achieve the goals that matter to you.

Steve Inskip, MBA, is a Regional Vice President for Greater Ontario Region at TD Wealth. He has over 20 years of experience in retail banking, commercial banking and wealth planning. He is a proud father of two young boys and, when he's not on the road for work, he can be found coaching at the local hockey rink or soccer pitch.