Most Canadians would never try to fix a smashed-up car on their own. But deciding when to call in an independent financial advisor is not clear, particularly when dealing with an investment plan or financial plan. People often overestimate their knowledge and abilities with their financial matters. But with complex concepts like tax-free savings accounts, exchange-traded funds, and low-fee online brokerages, DIYers have never had more financial and investment choices.
This array of financial choices comes with potential pitfalls and unanticipated tax considerations. If not properly addressed, such issues can undermine your financial plan, and in the worst-case scenario, toss you into an abyss of financial chaos. This is why finding an independent financial advisor you can trust is important, particularly if you are trying to maximize cash flow and grow your wealth.
Why work with an independent financial advisor?
Generally, managing your money and investments can be challenging. An experienced independent financial advisor can help create a well-thought-out financial plan. Such an expert can carefully assess your current financial situation, determine your current & future financial goals, advise you on the most viable financial product to buy, and regularly review or update your investments.
The specific financial advisor you hire depends on what help you seek. Suppose you need specialized insights; it would be best to look for a financial counsellor with a wealth of knowledge and experience in that area. Clients who need stocks investment counsel should find an expert in that field, while clients who run real estate investments would want to work with financial advisors who have experience in such investments. So, your investment goal will determine the right independent financial advisor to work with.
Who qualifies as a financial advisor?
The terms ‘financial planner’ and ‘finance advisor’ are very common, but they do not always mean that an individual has specific certifications, qualifications, or expertise. Outside Quebec Province, any Canadian can call themselves a financial planner or financial advisor.
What sets reliable and professional advisors apart from inexperienced ones is specialized training in financial planning, asset evaluation & management, general financial planning education, and qualifications. Keep in mind that financial planners have many designations: personal financial planner, certified financial planner, and registered financial planner. There are different requirements for each designation, which is why you should ask your preferred financial counsellor about their knowledge of financial planning, education, and other relevant qualifications.
Difference between a financial planner and financial advisor
Financial planners help people create a comprehensive plan to achieve long-term financial goals. A planner can also help businesses or individuals to develop a budget, identify various ways to save money on taxes, help with retirement planning, and offer estate planning advice.
On the other hand, the term ‘financial advisor’ refer to nearly anyone who can help you plan and manage your money. This could be an insurance agent, a stockbroker, or an employee within your institution. These financial professionals offer other services such as investment management, calculation of income tax, discretionary portfolio management, and evaluate various investment decisions.
Some financial planners tend to limit the services they provide to specific areas. No matter the particular type of financial expert you are looking for, you must determine if they are registered. By law, all sellers of mutual funds, bonds, and stocks must complete the recommended training and be registered with a territorial or provincial securities regulator.
Check if the advisor had been under any investigation or there has been disciplinary action against them. Find out if there have been complaints against the advisor and get more details about such issues. Remember, the financial industry is changing, and you need independent planners or financial planning firms that can help you gain an in-depth understanding of finance, answer tough questions regarding your retirement goals and other aspects of your finances.
Where to find a reliable financial advisor
Credit unions, banks, and caisses populaires: These financial institutions have specialists who can help you understand and purchase various types of investments, including guaranteed investment certificates (GICs), term deposits, and mutual funds. Also, they can help you contribute to or start a registered savings plan like a registered education savings plan (RESP), registered retirement savings plan (RRSP), a tax-free savings account (TFSA), and registered disability savings plan (RDSP).
Mutual fund dealers and stockbrokers: There are trained and licensed individuals who can help you sell or buy investments such as mutual funds, stocks, or bonds. These experts can also help you contribute to or start tax-free savings accounts, registered education savings plan, registered retirement savings plan, or registered disability savings plan.
Insurance companies: Nearly all insurance companies have employees trained and licensed to sell different investment projects such as annuities, segregated funds, and mutual funds. Insurers also provide different types of insurance policies.
Independent financial advisors or financial planning companies: Financial consultants and companies can offer advice regarding personal finance, investment options, income, and more. They charge a fee for the services provided.
Choose a financial advisor you can trust
Financial planning is more than just understanding your annual income, net worth, monthly expenses, and investment goals. It would be best if you had a financial expert with a wealth of financial knowledge regarding different aspects of finance and investments.
The financial advisors, counsellors, and planners at PersonalBanker have extensive experience in money management, portfolio management, and other aspects of finances. They can help clients understand various financial concepts, risk management, financial management, investment decisions, and more.