A recent three-year study by the Financial Planning Standards Council called The Value of Financial Planning found that Canadians who work with a certified financial planner are more likely to report their financial affairs are on track than those dealing with non-certified planners.
So how do you locate a competent financial planning professional?
Since financial planning is not regulated in most provinces, just about anyone can call themselves a financial planner. This leaves the consumer with the job of ensuring their planner is qualified to provide the right advice.
The council offers these tips for choosing a financial planner:
1. Familiarize yourself with some of the basic terms and strategies so that you can be involved in the process.
2. Consider your personal and financial goals in advance of meeting with an advisor. Determine what is most important to you.
3. Ask for recommendations from friends and family members.
4. Check them out. Once you have some trusted referrals, verify the planner’s qualifications.
5. Talk to two or more planners about their credentials and their approach to financial planning.
6. Ask them about fees for their services and/or fees for accounts and transactions.
7. Designations such as certified financial planner (CFP) represent a commitment to standards of practice and ethics, similar to that of chartered professional accountants (CPA).
8. Ask for a written letter outlining the services the financial planner will offer, as well as methods of compensation.
9. Communicate with your planner regularly to ensure they understand your changing needs and to update your plan.
10. The relationship between you and your financial planner is built on trust, so make sure that you are comfortable with them.
The Financial Planning Standards Council, incorporated on Nov. 10, 1995, is a not-for-profit organization which develops, promotes and enforces professional standards in financial planning through a certification process. The council’s purpose is to instill confidence in the financial planning profession.
If you would like to verify a CFP’s designation, visit www.fpsc.ca/directory-cfp-professionals-good-standing
Colleen Barker is a certified financial planner with the Fraser Financial Group in Vernon. This article is provided for information purposes only. Please consult with a professional advisor before implementing a strategy.