There are as many as 100,000 people across the country who call themselves financial planners, consultants or advisers — but that’s not to say that they’re all doing the same type of work.With the exception of Quebec, where the industry is much more tightly regulated, for the most part they’re governed by a hodgepodge of regulatory bodies and designations.The result is an alphabet soup of acronyms: CFA – Chartered financial analystCFP – Certified financial plannerCHFC – Chartered financial consultantCIM – Canadian investment managerCLU – Chartered life underwriterCMP – Certified management professionalRFP – Registered financial plannerTEP – Trust and estate practitionerHere are five basic things that can help you evaluate a potential financial adviser.
1.Plan ahead: The first step is often to decide what sort of financial strategy you need.Are you a saver?
A buy-and-hold investor?Are you willing to roll the dice a little?Picking an adviser who is among the best in long-term thinking might not be ideally suited for your daytrading needs, for example.
So figure out what your ultimate goal is, and work with someone who can demonstrate that they’ve got the expertise to help you reach that goal.2.Ask around: Friends and family can be a great first step to finding a reliable source of financial advice.
Ask around and see if anyone in your circle has an adviser they’d recommend, or tips to share.Hearing about a bad experience and what went wrong can hone your decision-making skills and help you figure out what questions to ask a potential adviser when sounding them out.3.
Get personal: Whatever you do, make sure you meet with the person face to face before making any sort of arrangement.Remember, the adviser is going to need to have very intimate knowledge of your finances, personal activities and goals, and you must be comfortable providing them with that information.4.
Follow the money: There are a number of ways that advisers get paid, and it pays (literally) to know which method yours uses.The most common is the commission-based model where the adviser gets paid a fee by the financial companies that make the products he or she sells.That’s great in principle (since the customer never has to pay directly for the service), but critics point out that it poses an inherent conflict of interest.
Certain financial products pay higher commissions than others, which gives the adviser a higher incentive to move you in that direction – whether it’s a good idea for your financial plan or not.That’s led a movement toward other types of payment plans, where compensation is more up front.Higher net worth clients often like the asset-based model, where you pay an adviser a certain percentage of your entire portfolio, so the payment grows as the portfolio grows.
That gives both parties an incentive to make the portfolio increase in value.Smaller investors might like a simple fee-based planner that charges by the hour.The cost shouldn’t be much more than about $100 or so an hour, and less and less time will likely be needed once the financial plan has been worked out and set up — perhaps nothing more than a checkup here and there throughout the year.
5.Beware the alphabet soup: From CIM, to CFA, to TEP and even RHU, there’s a dizzying array of letters signifying credentials for financial professionals.But experts say the two types that most consumers should look for are either CFP or RFP.
Those stand for certified financial planner and registered financial planner.The latter is generally for more advanced investors, but they share the common trait of not actually selling any financial products.
There are many financial advisors but finding the right one for the family is a difficult proposition.The number of firms dealing with wealth management and the number of financial advisors make it difficult for the consumers to find the right one to handle their finances.By going online and checking for the different services you need, the financial advisor to help you, you may be able to find the right one for you.
Who is the Right Financial Advisor?Each customer faces the most important question when it comes to looking for the right financial advisor to help you with investments.There are different questions like who is the right financial advisor for me?
Will he be able to advice in things like investments, real estate and reduction of tax?The final question is his fees to handle these services.Very often it is said that the right financial advisor depends on the amount you want to invest.
Traditionally this was done by referrals, face to face meetings and references from satisfied friends.Today it is mostly online search engines that are used to find the financial advisors.They are free as well as anonymous.
Characteristics You Should know before you hire a Financial Advisor A Financial Advisor you hire should be registered.Most of the advisors are mutual fund dealers and stock brokers.Stock brokers deal with a lot of investments like mutual funds, bonds, stocks as well as stock traded funds.
Mutual fund dealers are involved in selling plans for education savings and also sell non – prospectus offerings.There are others who are known as portfolio managers and attend to rich clients and are formally known as advisors.To check for the advisors or dealers registration in the province, you have to check in the investors section of Ontario security commission website and check with the last name or name of the firm.
The Best GIC Rates in Canada To know the best GIC rates in Canada, you have to shop all banks and lenders and get the rates.Whether it is the short term GIC which is cashable or the long term RRSP GIC, the best rates are available on site.A guaranteed investment certificate (GIC) helps Canadians to invest some money and earn interest.
You can invest it in a Bank or other financial institutions for a certain period.It can be invested for 30 days right up to 10 years and you will get interest on the amount for the time the money was contracted to them.The longer the money is kept with them the higher the rate of interest.
The Different Types of Guaranteed Investment Certificates GIC can be invested in anything.You can invest in the bank for a short time and get savings account interest rate.If you invest in saving in a registered savings account, then there is RESP GICs, RRSP GICs and TFSA GICs.
If you are a regular traveller to the US then you can invest in US currency GIC.If you are looking for a financial advisor, choose one who can help you with all your financial investments.About Author Do you want to know more about Toronto Financial Advisor?