It’s a good question, and one I run into a lot – mainly because I am a
Certified Financial Planner myself. Essentially, a financial planner
can help you organize and optimize all aspects of your financial life.
This includes everything from getting your budget balanced to saving
taxes to helping you set up a long-term retirement savings plan,
putting your kids through post-secondary school, and recommending the
investments that are best for you – and even managing them if they are
registered as portfolio managers.
Can all financial planners do all of this? Certainly, those who have
professional credentials such as Certified Financial Planner (CFP) have the
skills and training to assist in many of these areas. You can start looking
for a financial planner through the
Financial Planning Standards Council, which is the industry body that sets and enforces the standards for those
seeking and holding the Certified Financial Planner designation. The FPSC
also has a handy 10-point checklist you can use when you meet with a
Ask about training and continuing education, designations, and professional
credentials. Organizations such as the Financial Planning Standards Council
and Chartered Professional Accountants (CPA) grant standing to those who
have successfully completed a standardized and rigorous program of study
and can provide a diploma and listing as a member in good standing of the
professional organization as proof of having done so.
Determine how long the planner has been practicing, with what firms, and
whether the planner has specialized training, such as investment management
or financial analysis.
Financial planners may offer a variety of services depending on their
qualifications, regulatory registrations, and employer (if not an
independent planner). For example, some planners can help with setting up a
comprehensive plan but may have decided to outsource financial product
sales or investment management to affiliated firms.
4. Planning philosophy.
Some planners offer a comprehensive planning service encompassing a
client’s entire financial picture, including setting up a plan and
executing an investment portfolio. Others may concentrate only on selling
mutual fund or insurance products, or may be “captive” to a single supplier
of such products and unwilling to offer products from competitors.
Financial planners frequently work with other experts in their organization
or at affiliated firms or professional offices, including those you already
consult, such as lawyers and accountants. Even the best planners can’t do
everything, but they can effectively control your plan and make sure all
the parts are integrated for maximum efficiency.
6. Method of payment.
Your planner should disclose in writing how they’ll be paid for their
services. The three most common methods of payment are 1) cost of service,
where the planner is compensated by the provider of the product they sell,
such as embedded fees in mutual funds, 2) percentage of assets under
management, 3) fee-for-service, based on an hourly rate or a menu of
Your prospective planner should give you an estimate of costs based on the
work they’ll be doing for you. Ask them to break out the estimate in terms
of the fee structure shown in Number 6 above.
8. Conflict of interest.
Does anyone else benefit from the planner’s recommendations or products
offered for sale? It’s sometime difficult to do, but it’s essential to
determine whether the planner puts anyone else’s interests ahead of yours.
Those planners holding a CFP designation must annually attest to a code of
ethics that clearly states your interests will always come first.
9. Regulatory compliance.
Financial planners who sell products such as securities or insurance must
be registered with provincial regulatory agencies or industry regulatory
bodies, such as the Ontario Securities Commission, the Mutual Fund Dealers
Association, or the Financial Services Commission of Ontario. In addition,
holders of professional credentials are members of professional bodies that
govern their fields and must adhere to a code of ethics.
10. Written agreement.
It almost goes without saying, but the planner should provide a written
agreement of the services to be provided. This provides a legal document
for both you and the advisor that spells out precisely what services you’ll
be getting, and for how much. It’s particularly important in cases where
the planner is also a registered portfolio manager and may be managing your
funds on a discretionary basis. – Robyn
Robyn Thompson, CFP, CIM, FCSI, is the founder of
Castlemark Wealth Management, a boutique financial advisory firm specializing in wealth management
for high net worth individuals and families. She is also listed as a
MoneySense Approved Financial Advisor. Contact her directly by phone at 416-828-7159, or by email at
for a confidential planning consultation.
Notes and Disclaimer
© 2018 by the Fund Library. All rights reserved. Reproduction in whole or
in part by any means without prior written permission is prohibited.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned are illustrative only and carry risk of
loss. No guarantee of investment performance is made or implied. It is not
intended to provide specific personalized advice including, without
limitation, investment, financial, legal, accounting or tax advice. Please
contact the author to discuss your particular circumstances.