Getting started on one of life’s most important relationships

It is a decision that will affect all aspects of your financial well-being, now and for years to come. Yet in all Canadian provinces except Quebec, there is no legislated standard in place governing minimum qualifications. 

Canadians with full financial plans report feeling more in control of their finances and more ready to meet their financial goals. They have an improved ability to save and more confidence about being able to cope with life’s financial ups and downs.

Those findings are the result of a three-year longitudinal study, The Value of Financial Planning, conducted by the Financial Planning Standards Council in conjunction with the Financial Planning Foundation.

The study included almost 15,000 Canadians of varying ages, incomes and socio-economic levels, proving that – contrary to the common myth – you don’t have to be wealthy, older or have a high income to benefit.

But to reap these benefits, you first have to find a financial planning professional who is appropriately qualified and right for your needs.

“There is an alphabet soup of financial advisory designations in the industry, some requiring minimal education and others involving the completion of a multi-year education program,” says Joan Yudelson, vice president of Professional Practice at the Financial Planning Standards Council. “The CERTIFIED FINANCIAL PLANNER certification represents the standard in financial planning, with strict education, examination and work experience requirements.”

In fact, CFP professionals must annually attest to a written code of ethics stating that their clients’ interests will always come first, she notes.

“I encourage people to ask, very simply: What are your qualifications? What education have you successfully completed? What is your approach to financial planning?” says Ms. Yudelson. “Proactively asking questions to gain a solid understanding of credentials, financial planning process, services offered and fees provides assurance that your future is in good hands.”

While appropriate qualifications are an essential baseline, your comfort level is also important, says Tina Tehranchian, CFP, branch manager and senior financial planner at Assante Capital Management Ltd. “If you want the relationship to be successful, you have to approach it with the same type of attitude that you would any other long-term relationship. You have to feel that this person cares about you and your best interests.”

Listening skills are key, she adds. “You should be able to feel the advisor is trying to understand you at a deeper level in order to put your financial planning in a context you can relate to and understand. Trust is critical to the relationship, and it can only be established through effective communication.”

No website can give you this sort of information, she notes. “It will only come out in one-on-one meetings.”

Before making the first appointment, ask if the advisor has an asset minimum, Ms. Tehranchian advises.  “If your account is small for that advisor’s practice, you may end up not getting the attention you expect.”

Conversely, she says, some advisors specialize in the family market and deal with clients with more modest portfolios. “If you have a multimillion-dollar portfolio, those advisors may not be properly equipped to help you with the strategies you need.”

During the first meeting, focus on a planner’s “promise and process,” suggests Scott Plaskett, CFP, senior financial planner and CEO at Ironshield Financial Planning.

“If you are looking for a professional to assist with decisions about your company pension plan, the life insurance in place to protect your family and education plans for your children, you don’t want to be working with a financial planner whose promise is making sure that business owners’ corporate affairs are properly in place,” he explains.

Then ask about the exact process that will be used to deliver on the promise, he says.

The first meeting should never be about going over your current investment and bank statements, Mr. Plaskett adds. “Don’t bring any of that, because you don’t even know if there’s a fit yet. What you want is to have a good conversation about how you would like your future to unfold.”

To find a Planner or Certificant in your area, use our Find Your Planner tool.

For more on finding a qualified financial planner who’s right for you, read Choosing a financial planner and 8 key traits of an ethical financial planner.

 

What do you need to know to find a financial planner who is right for you and has the appropriate credentials and experience? It’s all right here. 

ABOUT

Independent research proves that comprehensive financial planning enables Canadians to achieve their life goals and enhances well-being. As part of an ongoing campaign to raise awareness about the importance of financial planning, Financial Planning Standards Council (FPSC) and Institut québécois de planification financière have declared November 16 to 22, 2014, to be Canada’s sixth annual Financial Planning Week. FPSC is a not-for-profit standards-setting and certification body that develops, promotes and enforces professional standards in financial planning through CERTIFIED FINANCIAL PLANNER certification.

CHECKLIST – HOW ARE YOU DOING FINANCIALLY?

Check each statement that applies to you:

  • I’m in control of my finances.
  • I’m prepared for a financial emergency.
  • I have enough income to enjoy my life.
  • I anticipate changing my career in the next one to five years.
  • I anticipate downsizing my home in the next one to five years.
  • I anticipate getting married or divorced in the next year.
  • I anticipate starting my family in the next year.
  • My loved ones will be looked after when I’m gone.
  • I’ll be able to retire in the lifestyle I want.
  • I only pay taxes that are absolutely necessary.
  • There’ll be enough money for my children’s post-secondary education.
  • I will be mortgage free by retirement.
  • My life goals and aspirations are achievable.
  • Financially, I have peace of mind.

A sound financial plan pro- vides assurance that you’re doing the very best you can with your resources, and will help you make informed choices when faced with life’s inevitable changes.