Financial Planners 101

Managing your finances is an essential part of future planning. You or someone you know may have a Registered Disability Savings Plan (RDSP), as well as other savings, assets (like a house), and money put away for retirement. You may also be thinking about wills, trusts and estate planning and whether you or the person you support will have enough money for the future.

Managing all these elements together takes time, knowledge, and effort, and can be overwhelming. For some, getting help with the process is the best way to go. In this article, we explore what a financial planner is, how to choose the right one, and if it’s the right decision for you.

What is a financial planner?

Financial planners will help you understand and meet your financial goals. For example, they could help you answer questions such as “Will I be okay if I buy a house?”, “Can I retire early?”, “Can I help my adult children buy a house?”, or “Who will take over as ‘holder’ of my loved one’s RDSP?”.

Financial planners specialize in areas such as investment planning, taxes, estates, or retirement planning. They support people with their financial goals and give tips, tools, and advice on how to meet them. Some planners will provide reports with charts and graphs, brief notes, or advise face to face. It is important that you find out what services are offered by your planner.

What about a financial advisor?

The term financial advisor is a bit broader but is different from a financial planner. Financial advisors help manage your money including investments and other accounts. They could be an employee of your financial institution, a stockbroker, or an insurance agent. Like financial planners, financial advisors have different areas of focus. Some will have licenses to sell investments such as mutual funds and stocks. To get any kind of license, a financial advisor must complete training and be registered with the relevant institution.

Most financial planners do not handle investments. If you want help choosing an investment for your RDSP, you will need support from a registered financial advisor. To learn more about the differences between financial advisors and planners, we recommend the guidance here.

If you are looking to work with a financial professional, it’s a good idea to do your research first. Some people may have multiple certifications, licenses, and titles. Continue reading for tips on how to find the right financial planner for you. 

Do I need a financial planner?

Financial planners are not essential. Yet, some people use them if they have complicated situations or need extra guidance. Managing your money and financial responsibilities can be a full-time job that requires a lot of time, energy, and knowledge. Getting the help of a professional can save you time and money in the long run. However, financial planners can charge a high fee for their service, so it is good to weigh up the benefits and costs.

How to find the right financial planner.

You first need to think about what you want your financial planner to do. Once you know this, you will be able to find someone who has experience in this area. You may also want to ask questions like:

  • What are your qualifications and experience?

Some financial planners have qualifications such as Certified Financial Planner (CFP) or Registered Financial Planner (RFP) designations. It is important to know what experience your planner has. They may or may not have experience working with people in similar situations as yourself. Spend the time to research and check their background. You may want to ask trusted family members and friends who they work with. You may be able to check their qualifications online, for example, through a tool like this:

  • What do I get for my money?

It is also important to ask what you get for your money. For example, will you get a report, a list of things to do, or some general comments? An example of the sort of document you might get after a review of your finances may be this:

  • How much do you charge for your services?

Financial planners charge an hourly or flat rate for their services. These fees will vary, and it is a good idea to check a few planners’ rates. Fees should be on the financial planner’s website or easily available. You can expect to pay a few hundred dollars for a meeting.

  • Can I work with this person?

Trust is important. You will be talking to them about your goals and finances. It is important that you work well with the person, and they understand what you want from them. You may want to build a long-term working relationship with this person and will need to make sure that they would like the same.

Where can I find out more information?