6 Tips For Finding The Right Financial Advisor

Money is personal for many individuals.  It’s hard enough saving it up in the first place, and even harder to find the right person to take care of it.  Not everyone needs an advisor, just like not everyone needs an accountant or a lawyer, or a realtor.  But for those that do not have the time or energy to make sure they are maximizing their registered accounts, mitigating their tax liability, withdrawing efficiently, ensuring they don’t run out of savings, and taking advantage of market opportunities, through counsel and guidance; it’s a worthwhile consideration.  But who do we hire?

Fortunately, we’ve narrowed down the six things to look for when shopping for a money person.

Determine Your Personal Financial Needs & Goals

Before you start looking for a financial advisor, you should have a clear understanding of your financial goals. Do you want to save for retirement, buy a home, pay off debt, or perhaps solely invest in stocks, ETFs, or mutual funds? Are you a business owner or an employee?  Having a clear idea of what you want to achieve will help you find a financial advisor who specializes in your specific needs. 

Check Their Credentials & Qualifications

Make sure that the financial advisor you are considering has the proper qualifications, such as a certified financial planner (CFP) designation, which indicates that they have undergone rigorous training and testing in various financial areas.   Some other designations that help tell you they know what their doing with your investments is the CIM – Chartered Investment management designation and the CFA – Chartered Financial Analyst designation.

Research Their Financial Experience

Look for a financial advisor who has experience working with clients who have similar needs and goals as yours.  Ask about their experience, and if they have any testimonials or references from satisfied clients. 

Some advisors work alone, but many others work on teams that may allow them to share experiences and collaborate about specific client situations.

Years of experience is ideal, but if you suspect they may be retiring before you do, inquire about their succession planning and a continuation of the business and advisory services.

Understand Their Fee Structure

Different financial advisors are compensated in different ways, such as commission-based (meaning you for each transaction and trade), advice-only (meaning you only pay for a specific service, like generating a financial plan), or fee-based models (where you pay a percentage based on the assets under management). It's important to understand how your financial advisor is compensated, as it can affect the advice they give you. Be sure to ask for a breakdown of all the fees you will be charged.

Understand Their Communication Style

You should feel comfortable communicating with your financial advisor and asking any questions you may have. The advisor should explain complex financial concepts in simple terms and be willing to work with you to create a financial plan that meets your needs.  It’s important to ask how many portfolio reviews a year they can expect, and how often they will contact you to keep you in the loop.

Schedule a Consultation

Last, but certainly not least, make sure you schedule a meeting with any of the prospective advisors.  It is very rare that a meeting will cost you anything out of pocket, and there’s something to be said for trusting your gut.  You need to make sure you vibe well with this person and feel confident in the individual you are meeting with.

Questions to Ask Your Financial Advisor

The six steps listed above may be easier said than put into practice.  Below, we have compiled a list of questions that coincide with each tip for finding the right advisor or assessing your current one.

We figured we could answer them too.

What are the credentials you hold?

Each advisor on our team holds a CFP designation issued by FP Canada, but our lead advisor also has CSWP, FMA, & FCSI.

What experience do you have?

Mark has been in the wealth management industry since 1998, Mike has been around since 1997 by starting in banking, and Jordan initially started in insurance, but has been managing clients since 2020.

What is your fee structure, and how do you get paid?

We use a simple fee-based model where each client knows what they will be paying.  On the first 1,000,000 of assets under management, the fee is 1.5%.  For the next million, the fee is reduced to 1.2%.  It’s 1.1% on assets over $2,000,000, and then if the entire household (family) is over $5,000,000 in assets, the fee is 1.0% on the amount over that figure.  This fee covers everything from withdrawals, trades, and transactions to financial planning and estate planning.  And on fees paid within non-registered accounts, the total amount can be deductible against your income.

What is your preferred communication?

We phone once per month unless otherwise indicated, and email a market update once per week.  Aside from a couple of summer months, we host a monthly seminar on a wide range of topics; this month is how to prepare your garden for Spring! 

How do you measure performance and report performance?

We measure performance against a benchmark, net of any fees.  Generally speaking, our target benchmark is the Toronto Stock Exchange. 

Conclusion

Money is personal, and it takes a special person to have access to your family’s financial picture.  Make sure you do your homework and go with someone that ultimately feels right.