Need a Financial Planner?
Here’s how to choose.

RRSP season is over, tax season is upon us and we are getting tired of the questions keeping us up at night. Have we saved enough, do we have too much debt, do we have the right investment strategy, are we making the right decisions to protect the estate we are trying to build? Many Canadians do not have a Financial Planner and even if they do they are not always sure their best interests are being served. So what questions do you ask? The first, how do they get paid? There are three basic ways a Financial Planner is paid for their services and how they are paid is important to you.

A Financial Planner paid commission earns money based on what they sell you or the number of trades you make in your investment account. This does not mean they are not looking out for you, but it does mean some objectivity can be lost. Often if you have a smaller, less active portfolio, this type of Financial Planner is best for you. If a commission-only Financial Planner is not willing to talk to you about debt, taxes and budgeting then find one who will. Investing is only one side of the story.

A fee-for-service Financial Planner earns a fee, typically hourly, for providing advice regardless of the number or types of transactions. They are more likely to spend time analyzing your portfolio and entire situation before making recommendations on investments, insurance, budget and taxes. This type of advisor is best suited for those with a large active portfolio. You will still pay fees on investments, but these fees are not allocated to your planner.

Salaried Financial Planners are found at your credit union and other financial institutions. These Financial Planners provide their services as a benefit to members/customers. At The Credit Union, we do not charge for their services nor do they receive any commission payments. Like with a fee-for-service Financial Planner, the member may pay fees on some types of transactions and mutual funds, but these fees are not allocated to your planner. In some cases these fees are waived or reduced once a portfolio gets to a specific size.

Regardless of how your Financial Planner is compensated, you should get referrals from family and friends. If you ever feel you are being sold and not advised take it as a warning sign. Do not be afraid to ask why they are making a specific recommendation. After all, it is your money and it is your life their recommendations will affect.

Other questions to ask:

• What type of training have you had? Education counts.
• How long have you been a Financial Planner? Experience counts.
• How many clients do you have? Make sure they will have time for you.
• How often do you typically meet with your clients? Does this meet your expectation or comfort level?
• How do you communicate – phone, mail, email? Does their preference match with yours?
• Will they help you fgure out a budget or review the one you have?
• Will they look at your debt and make recommendations for reducing interest costs?

Make sure your Financial Planner talks to you about your:

• will and estate planning
• debt
• taxes
• credit history
• life, disability and health insurance
• retirement and pension plans
• family situation and commitments
• plans for your children’s education
• homeownership status and future plans
• fnancial goals and other important goals you have

The most critical piece of advice is not to delay in setting up your financial plan. We are here to help. We want to C.U. to get you started on your future today.