Hiring a financial planner

Let’s not sugar-coat it. Money is important to all of us, even though many of us don’t necessarily want to admit it. Even the least worldly of us wants a dry bed, a roof over our heads and our daily bread. And that takes money. 

In today’s world, it’s even more complicated. Navigating through the maze that is comprised of mortgages, insurance, pensions, RRSPs, TFSAs, etc. can be overwhelming. It’s no wonder that most people turn to hiring the advice of some sort of financial adviser.

But how do you decide whom to place your trust in?  It’s a big decision – one that will likely result in a very long-term relationship – so it just makes sense to take your time and find the right person. There may never be a “perfect” person for you, but by asking a few questions (of yourself and of your candidates) you should be able to find a trusted adviser that you can work with for life.

If I was not in the business myself and if I was looking for someone to help with my financial affairs, I’d ask the following series of questions.

Questions to ask of yourself…

Do I need an adviser at all?  Admittedly I’m biased, but I believe that the vast majority of individuals are ill-suited to manage their own investments. This is evidenced by the many studies that point out the value of advice.  Of course, there is always the odd individual who can do it themselves, but do not make that decision lightly.  I’ve personally seen too many people come to me after trying to do it themselves and having gotten themselves into a position that they just don’t have the time or resources to be able to recover from, even with help. So consider the question, but be certain before going down the Do-it-Yourself route.

How complicated is my situation now and how complicated is it likely to get? In other words, do I need a Certified Financial Planner (CFP) or would it be just as good for me to use an investment and/or insurance adviser?

Do I care if they share my faith and/or values? It’s been my experience that most people prefer someone who thinks along similar lines as themselves, but it’s a matter of degree.  How important is it to you?

Questions to ask potential candidates…

What is your education? Are you a CFP?  What other education do you have (formal or informal)?

How do you get paid (commission, hourly fee, or asset-based fee)?

How long have you been in the business? How do I know that you will be there for me 10, 20 or 30 years from now?

Tell me about your firm (both your company and also the dealer you work with).

How long have you been with the dealer/firm you are with now?  How does that relationship work?

Are you obligated to only sell their product?  

How often will we meet?  What communication can I expect of you?

How do you decide on your investment recommendations?

What is your process for bringing on new clients?

What makes you different?

Do you advise on more than just investments? Insurance? Taxes? Estate Planning?

What is your emergency plan if something happens to you? Who will look after my money if you die or are disabled?

When do you plan to retire?  What will that mean for me?

Are you registered with a securities regulator?

Are you licensed or able to sell any other products or provide any other services?

Are you currently under investigation by any regulator and do you have any restrictions, terms or conditions on your registration?

Talk to me about how you secure my data.

Some of these questions may feel insensitive to our Canadian ears, but it’s your money and you deserve to know. Believe me, most advisers will be happy to share all of this information with you without hedging. Certainly, the good ones will. 

Good advisers want clients to trust them, but they also want them engaged. By taking the interview process seriously, not only are you more likely to find a good fit, you are also demonstrating that you are indeed engaged in the process. Your new adviser will appreciate that you are taking the decision seriously.   

Arnold Machel, CFP® lives, works and worships in the White Rock/South Surrey area where he attends Gracepoint Community Church.  He is a Certified Financial Planner with IPC Investment Corporation and Visionvest Financial Planning & Services.  Questions and comments can be directed to him at dr.rrsp@visionvest.ca or through his website at www.visionvest.ca.  Please note that all comments are of a general nature and should not be relied upon as individual advice.  The views and opinions expressed in this commentary are those of Arnold Machel and may not necessarily reflect those of IPC Investment Corporation.   While every attempt is made to ensure accuracy, facts and figures are not guaranteed.