Choosing an advisor

4 questions to ask yourself

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 transactionTransaction The process where one person or party buys goods or services from another for money. Examples include taking money out of an account, buying something with a credit card or taking out a loan.+ read full definition, such as choosing the right savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at any time.+ read full definition. You may need an advisor to help you reach a long-termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition goal, such as saving for retirement. Choose an advisor who understands your goals and who can provide the appropriate advice.

2. How much do you know about investing?

For example, if your investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition knowledge is low, you may want to choose an advisor who will recommend simpler optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition 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 investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition, say, at least $250,000. However, there are many advisors who work with investors with less to invest.

4. What type of products and services do you need?

The products and services that an advisor can offer depends on their registrationRegistration A requirement for any person or company trading investments or providing advice in Canada. Securities industry professionals are required to register with the securities regulator in each province or territory where they do business.+ read full definition and qualifications. Some can advise only on certain types of investments. Others have additional training and experience in financial planning, estate planningEstate planning The plans you make to build and manage wealth for your lifetime and thereafter. Goals may include leaving the most money possible to your loved ones, with the least amount of taxes. Other goals may include caring for children, paying off debt or passing on a business.+ read full definition and taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition 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 regulatorSecurities regulator A government agency that enforces the securities act in jurisdiction it has authority over. This act is made up of laws that establish rules for issuing and trading securities. The Ontario Securities Commission is the securities regulator for Ontario.+ read full definition, unless they have an exemption. Check registration through the Canadian Securities Administrators.

Take action

Use this checklist to help you choose an advisor.

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