A Good Investment — Choosing A Financial Planner That’s Right For You

Planning for one’s financial future is a good thing to do, but it’s not always easy. Tax laws change, interest rates fluctuate, and the current array of financial products available can be bewildering. That’s why the services of a good financial planner are almost indispensable. Fortunately, there are many planners available who bring a wide range of skills, backgrounds and approaches. But how do you find someone who can best meet your needs?

First, ask friends, relatives or colleagues if they have used the services of a financial planner and been satisfied. Once you have several names, ask for a short meeting with each to get acquainted. Chemistry is a key goal. You need someone you feel comfortable with and to whom you can relate. Take your time and follow both the recommendations of others and your instinct.

In advance of meeting, ask for and review any print or online information about the planner. Often such information can answer questions in advance and provide you with a basis of comparison with other financial planners. Your meeting should involve no fee, products, or actions. Rather, you will discuss how the planner would work with you.

Determine the planner’s education and experience and how long they have been in the business. Don’t be shy about asking for credentials. The Canadian Institute of Financial Planning (CIFP) is a professional body that accredits and regulates its members. Most members of this association come with financial backgrounds in fields such as life insurance, mutual fund sales, accounting, stock brokerage and trust and estate planning. Ask all that you meet if they are members of the CIFP. If not, ask why.

You can ask for references and a sample financial plan from a client whose circumstances and objectives are similar to yours. Establish the planner’s unique areas of expertise and determine which other associated professionals they work with. Do they concentrate on a particular type of client? Are they biased toward a certain type of investment? Will they work with you personally or will they have an associate handle your account? If the latter, meet that person and ensure that he/she is also well qualified.

Find out how the planner will communicate with you and how often. Determine if they will review and report regularly on how your investments are doing and also on their performance vis-à-vis alternative investments and other standard benchmarks in relation to your long-term goals.

What will their services cost? How do prospective planners actually earn their income? Many rely on commissions earned from the investment products you buy. Some "fee-only" planners do not. Are there any conflicts of interest? This may not be a bad thing as long as they clearly state those conflicts in advance. How much of their time will you and your investments really get? What protection do you have if they make a mistake?

Write your questions in advance and take notes during your meeting. If the prospective planner doesn't answer your questions adequately, return your phone calls promptly, or seem truly interested in presenting investment choices that reflect your personal circumstances, then let the buyer beware.

Take the time to choose your financial planner wisely. It could be one of the best investments you ever make!