Choosing a financial planner

In Canada, financial planners are known by many different titles. While some may call themselves a “financial plannerFinancial planner An individual who looks at your financial situation and builds a complete plan to help you reach your goals. The process may cover: financial planning, risk management, investment planning, tax planning, retirement planning, and estate planning.+ read full definition”, others may be a “financial advisor”, “financial consultant” or “investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition advisor”, to name just a few. This is because financial planning is not regulated in most Canadian provinces and territories.

Financial planners can also have varied training, qualifications and experience. Many financial planners have passed courses and exams in financial planning, and hold designations granted by an education provider or standards body. Others are also registered with their 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 to sell investments or provide investment advice. They may also be licensed to sell insurance or hold designations in accounting or 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.

Ask about and understand the qualifications and experience of a planner before you work with them. Make sure the products and services they provide meet your needs.

Financial planning credentials

There are many financial planning designations, which offer a combination of training and experience. Most designations require training in money management, investing, taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition, estateEstate The total sum of money and property you leave behind when you die.+ read full definition planning and insurance. Some also include ethics and a voluntary code of conduct. Your planner’s qualifications will help you make sure they can provide the services you’re looking for.

If your planner also sells investments or offers investment advice, they need to be registered with their securities regulator. There are different 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 categories. For example, some planners are registered to provide advice only on mutual funds. Others can advise on a broader selection of investments. Make sure the services they are registered to provide meet your needs.

Examples of financial planning credentials

Examples of additional qualifications that financial planners may hold

6 tips for choosing a financial planner

1. Understand your financial goals and needs

Choose someone who can meet your goals and needs. For example, if you want your planner to provide investment advice, choose someone who is registered with their securities regulator. If insurance is a priority, look for someone who has an insurance licence.

2. Check qualifications

Referrals from trusted sources are helpful, but not enough. Check each potential planner’s qualifications and background. Find out if they have any credentials. Call their professional associations to check on any complaints against them.

If they sell investments or provide investment advice in Ontario, you can also check out their qualifications and background through the Ontario Securities Commission.

3. Interview more than 1 planner

Make sure you feel comfortable discussing your finances with the people you interview. Find out if they provide the services you want. Ask each person about:

their education, experience and specialties,
how many clients they have,
how long they’ve been a planner,
how often they communicate with clients,
what kinds of investment products or services they’re registered to sell, if any,
which organizations they’re regulated by,
how they’re paid, and
if they’ve been subject to disciplinary action by any regulator or industry association.

4. Ask for references

Ask for references from clients with similar needs to yours. Find out if the planner works with any other experts, such as lawyers, accountants or insurance agents. Ask for references from these individuals.

5. Compare fees

Ask the planner to explain how they’ll be paid, and compare their rates with others. Make sure you get a written letter outlining the specific terms of your agreement. Also make sure you get notice in writing of any changes to compensation structure during your relationship.

6. Understand any conflicts

If your planner is also qualified to buy and sell investments, understand how they choose investments for you. Do they recommend a wide range of investments? Or do they only recommend certain products such as mutual funds from certain companies or only products that their firm sells? Will they make more money if they recommend one investment over another? Do they make money from sales fees every time you buy and sell?

If your planner also sells investments or provides investment advice, you can check their qualifications and background through the Ontario Securities Commission.

Key points

Check the background of your planner. Understand the qualifications they have and whether their qualifications meet your needs.

Take action

Use this checklist as a guide to interviewing financial planners.

Last updated April 23, 2019