It’s often a good idea in life to get advice from experts. This is particularly true when it comes to your finances. Find out more about how to assess your needs and where to find a financial advisor.
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How do you decide what you need from a financial advisor?
Knowing what you need from a financial advisor will help you choose one that’s right for you. Here are four questions you can ask yourself to help you determine what you want from a financial advisor:
1. What are your financial goals?
The type of advisor you choose will depend on what you want to achieve. You may need help with a single transaction, such as choosing the right type of account. You may need an advisor to help you reach a long-term goal, such as saving for retirement. Choose an advisor who understands your goals and who can provide the appropriate advice. Learn more about creating your financial goals.
2. How much do you know about investing?
If your investment knowledge is low, you may want to choose an advisor who will recommend simpler options and help you understand each option. If your investment knowledge is high, you may want to choose an advisor who can offer you a wide variety of investments.
3. How much money do you plan to invest?
Some advisors only work with investors who have a lot of money to invest, say, at least $250,000. However, there are many advisors who work with investors with less to invest. It’s a good idea to decide how much you’d like to invest now, and on an annual basis for the next few years.
4. What type of products and services do you need?
The products and services that an advisor can offer depends on their registration and qualifications. Some can advise only on certain types of investments. Others have additional training and experience in financial planning, estate planning and tax planning. Think about the range of products and services you need, and choose an advisor who is qualified to provide them to you.
Anyone selling securities or offering investment advice must be registered with a securities regulator, unless they have an exemption. Check before you invest.
Use this checklist to help you choose an advisor.
Where can you find a financial advisor?
There are many ways to find a financial advisor. You may prefer to find one through referrals or through online sources. There are four potential sources of referrals:
1. Family and friends
People you know can be a helpful source of referrals, especially if their financial needs and goals are similar to yours. Ask who they get advice from, and for what products and services. Local community groups may put on workshops or give free advice about finance and investing. Look for information on your town or city’s website or check your local newspaper.
2. Your workplace
If your workplace offers pension and other employee savings plans, it may provide employees with access to a financial adviser. If you’re a member of a union, it may also be able to help you find an advisor.
3. Your bank
Customer service representatives at your bank can help you with setting up a bank account, or buying savings bonds and GICs. If you want to take out a loan, they can refer you to a loan specialist at the bank. They can also refer you to a financial advisor who works in the bank if you are interested in mutual funds or other types of investments.
4. Other professionals you work with
If you have a lawyer or accountant, they may be able to suggest potential financial advisors.
You can also search for an advisor in your area using online search engines or directories. Most advisors belong to an industry organization. You can search for advisors on their websites. Here are two groups you could try:
Canadian Investment Regulatory Organization (CIRO)
Canadian Investment Regulatory Organization (CIRO) consolidates the operations of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). CIRO is a self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada’s debt and equity marketplaces.
FP Canada is a not-for-profit industry group that develops, promotes and enforces professional standards for financial planners in Canada. Use this directory to find a Certified Financial Planner near you. They also publish an annual list of planners who have faced disciplinary action.
Anyone selling securities or offering investment advice must be registered with a securities regulator, unless they have an exemption. Check registration through the Ontario Securities Commission or Canadian Securities Administrators.
You can also check the Canadian Securities Administrators (CSA) disciplined persons list to see if an advisor has been disciplined by their provincial securities regulator.
If you are looking for a financial advisor, determine your needs first. Ask yourself:
- What are your financial goals?
- How much do you know about investing?
- How much money do you plan to invest?
- What type of products and services do you need?
You can find an advisor through referrals or online. Remember to always check the registration of anyone selling securities or offering investment advice.