What to ask a financial advisor

Last post, I talked about what you can do to figure out that universal retirement question: “How much is enough?” And I recommended that you meet with a financial advisor at least once before you retire.

I had a couple of queries about whether that was really necessary and how to find the right financial advisor that I’ll attempt to address today.

Like most things, working with a financial advisor has pros and cons. One of the biggest advantages is the time they can save you in your financial planning and selecting of individual investments for your portfolio based on the numbers of years before you retire, your risk tolerance, investment preferences, etc. Most of us don’t know much about investing or financial planning, so getting some expert advice on how to customize our plans to meet our retirement goals can be extremely beneficial.

Of course, you have to pay for that expertise. Some will charge an annual percentage of your portfolio value, while others charge a flat annual fee for services. And, just like any industry, not all financial advisors are equal in terms of knowledge, expertise, ethics and communication skills. It pays to do some research.

With over 100 financial advisor designations, the landscape can be a bit confusing. Some certifications require licensing, extensive training, and years of work experience. The most common financial advisor certifications are certified financial planner (CFP), registered financial planner (RFP) and the banking industry’s personal financial planner, (PFP). There are other designations which also require extensive education, experience and high standards, so do your due diligence regarding their qualifications before hiring an advisor.

The Financial Planning Standards Council has a searchable directory of 18,000 individuals who hold the CFP designation which also indicates how the individual is paid. The council estimates that 80 per cent of Canada’s financial planners are CFPs. If a Registered Financial Planner is your preference, check out this directory. Most banks also have advisors who can help, just be aware they are usually focused on products sold by their institution.

You may have put off working with a financial advisor because you don’t know who to choose, or what questions to ask. Just as you do with a retirement coach, you want to find a someone you can trust, and who is tuned in to your specific needs. You may wish to interview several advisors to find someone you feel comfortable with.

Here are 10 questions the Financial Planning Standards Council recommends you ask potential advisors before you decide to work with them.

 10 questions to ask a planner 

 1. What are your qualifications?
 2. What experience do you have?
 3. What services do you offer?
 4. What is your approach to financial planning?
 5. Will you be the only person working with me?
 6. How will I pay for your services?
 7. How much do you typically charge?
 8. Could anyone besides me benefit from your recommendations?
 9. Are you regulated by any organization?
 10. Can I have it in writing?
 Source: Financial Planning Standards Council

You may also want to ask about:

How have their returns compared with their respective benchmarks?  In general, your advisor’s investment portfolio returns should match or surpass those of their respective benchmarks, e.g. TSE, Dow Jones, Standard & Poor’s 500 index, etc. If they don’t, ask why.

References. Make sure you contact current and former clients to find out what they like or didn’t like about the advisor to determine if he/she is a good fit for you.

You can always go it alone and manage your financial portfolio yourself. Having a knowledgeable financial advisor that you trust can give you added confidence and alleviate some of the stress associated with whether your finances will last you through your retirement years.

To learn more about how you can plan for and live your ideal retirement, visit our website at: www.youridealretirement.ca or email: info@youridealretirement.ca

We offer a variety of coaching programs and workshops for individuals, couples and groups to help you assess your readiness to retire and how you can create a smooth transition from the workforce or enhance your current retirement lifestyle.



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