Financial planners can help you plan for retirement, find the best way to finance a new home, save for your child’s education or simply help put your finances in order. Whatever your needs, working with an appropriately qualified financial planner is a crucial step in helping you meet short-term and long-term goals that will help ensure your future financial well-being.
The following questions will help you interview and evaluate financial planners.
Don’t be afraid to ask these and any other questions you feel need a full and open answer.
1. What are your qualifications?
Many people offering financial services call themselves financial planners. However, financial planning is a detailed, comprehensive process requiring hands-on experience and a strong technical understanding of topics such as personal tax planning, insurance, investments, retirement planning and estate planning – and how a recommendation in one area can affect the others.
In addition there is no legislated standard in place in Canada for individuals who call themselves financial planners to obtain any credentials whatsoever. Be sure that your planner is appropriately trained, certified and held accountable to professional oversight .
2. What experience do you have?
Experience is an important consideration in choosing any professional. Ask how long the planner has been in practice, the number and types of firms with which s/he has been associated, and how their work experience relates to their current practice.
Inquire about what experience the planner has in dealing with people in similar situations to yours and whether s/he has any specialized training.
3. What services do you offer?
The services a financial planner offers will vary and depend on their credentials, registration, areas of expertise and the organization for which s/he works.
4. What’s your approach to financial planning?
The types of services a financial planner provides vary from organization to organization. Some planners prefer to develop financial plans encompassing all of a client’s financial goals. Be sure to work with a planner who considers your overall financial goals, values and attitudes even if they specialize in a specific area such as taxation, estate planning, insurance or investments.
5. Will you be the only person working with me?
It is quite common for a financial planner to work with others in their organization to develop and implement financial planning recommendations. You may want to meet everyone who will be working with you.
6. How will I pay for your services?
Your planner should disclose in writing how s/he will be paid for the services they provide. Understand how your potential planner will be compensated and choose whatever model works best for you. Planners can be paid in several ways:
– From the cost of the product: Some planners receive their compensation directly from the product manufacturer when you purchase a product through the planner. For example, their compensation is part of the management fee of the fund. In this case no money is exchanged between the client and the planner. Rather, the cost to the client is embedded in the cost of the mutual fund.
– Percentage of assets under management: Some planners will charge a fee as a percentage of the assets they are managing or administering on your behalf.
– Fee-for-service: Some planners charge an hourly or set fee for the service they provide.
7. How much do you typically charge?
While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed.
8. Who benefits from your recommendations?
Ask the planner – regardless of fee structure – if they have a written professional obligation to put your interests ahead of their own.
9. Are you regulated by any organization?
Financial planners who sell financial products such as securities and insurance or who provide investment advice must be regulated by provincial regulatory authorities. They may also subscribe to a code of ethics through a professional association. Others who are members of the accounting and legal professions are usually members of professional bodies that govern their fields.
It is a fair question to ask if a prospective financial planner has ever been the subject of disciplinary action by any regulatory body or industry association.
10. Can I have it in writing?
Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.
– Financial Planning Standards Council
