Choose Your Financial Planner

You have finally decided you need a Financial Planner and a Financial Plan How will you choose who to work with?

There is a plethora of titles and designations out there. Financial Planner, Financial Advisor, Investment Advisor - which one?

• Financial Advisor - this is the all encompassing name. It broadly defines anybody with a Mutual fund license.

  A Mutual fund license allows you to sell Mutual funds and provide investment advice pertaining to Mutual funds. Anyone wishing to sell Mutual funds in Ontario must hold this license.

• Investment Advisor - this can be anybody with a mutual fund license or a securities license. Many firms call their sales representatives - Investment Advisors.

• Stock Broker - this is someone who holds a securities license, is registered in Ontario, and works for a stock brokerage firm. They deal with stocks and bonds, they may or may not provide investment advice as part of their service.

• Mutual Fund Sales Representative - these are people who normally work at financial institutions and have obtained their Mutual Fund License so they can freely advise customers concerning the purchase of Mutual Funds.

• Insurance Agent - anyone who holds a valid insurance license can advise about and sell Life, Disability, and Critical Illness Insurance. They are also the only ones who can advise about and sell Segregated Funds.

• Financial Planner Anyone with a license can call themselves a “Financial Planner” It is important to understand what your potential financial planner will do. If it is only investment advice you will probably want to look elsewhere for more in depth planning.

  Types of Licenses are:

  Insurance Licenses are granted by the Financial Services Commission of Ontario (FSCO) which also regulates:
  • Auto Insurance
  • Co-operatives
  • Credit Unions
  • Caisses Populaires
  • Loan & Trust Companies
  • Mortgage Brokers
  • Motor Vehicle Accident Claims Fund
  • Pensions

OK we have briefly discussed licenses that are required in the Province of Ontario to provide different levels of financial services.

Now we will discuss designations.

Designations

Chartered Professional Strategic Wealth - Ch.P - is granted by the CSI. A prerequisite is the Canadian Securities Course.

Fellow of CSI - granted by CSI and has a prerequisite of the Canadian Securities Course.

Canadian Investment Manager - CIM - granted by the CSI and has a prerequisite of the Canadian Securities Course.

Professional Financial Planning Course - PFPC - granted by the CSI. Successful completion of this course allows the Candidate to write the CFP exam.

Derivatives Market Specialist - granted by CSI and has a prerequisite of the Canadian Securities Course and is specialized in dealing with financial derivatives products.

Financial Management Advisor - is strictly Canadian - this designation is not recognized in the province of Quebec. Granted by CSI and has a prerequisite of the Canadian Securities Course, Professional Financial Planning Course - PFPC, and Wealth Management Techniques Course - WMTC

As you can see Financial Advisors come in all shapes and sizes and levels of Knowledge.

To pick the right advisor for you. You have to understand a little bit of different types of Advisors that are out there.

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After you decide which designation is most appropriate for you to work with. You will want to find someone who puts you first.

This is where your gut instinct comes in to play.

Is the financial advisor telling you want to hear just to get your business?

Are they talking strictly about return on investment? Rather than true family needs like taxation issues, life Insurance, child education, retirement goals, debt reduction? Have they taken the time to really make you aware of your Risk Tolerence?

This could mean they are a very excellent “Investment Advisor”, but not the financial planner you are looking for.

If the advisor talks jargon like this: “If you got in on this IPO. We do expect some volatility during a market correction, but overall we expect investors will pick up another 200 basis points!”

HUH? You need a financial planning course just to talk to this guy.

When I slip into jargon while speaking with a client. I can instantly tell by the furrowed brow and glazed over eyes. I stop, reorganize my thoughts and go forward speaking clear language.

The Trustworthy Financial Advisor:

Is comfortable with speaking to clients about fees and commissions: Evasiveness on this topic is a warning signal.

Has good communications skills: Talks in everyday language and provides clear explanations for what little jargon gets used.

Asks questions: Displays curiosity and interest about you as a person.

Makes time for clients: Replies promptly to inquiries and doesn't make clients feel like they're imposing on a busy person.

As reported by Rob Carrick in the 29 May 2008 issue of the Globe and Mail.

Never blame your financial planner for a market downturn. market downturns are part of the investing process. Market downturns happen! Your financial planner can’t know when the next one will happen.

• Always check to see if your investment advisor is registered with the appropriate Securities Watchdog or in the case of life insurance agents, with the Financial Services Commission of Your Jurisdiction prior to making any investments

• When buying investment products always make your cheque** payable to the company where funds are to be invested, not to an individual agent or their company

• If you are looking for an investment advisor, take the time to do your research. Ask for references,experience and certification and always review the prospectus of the investment

**If your financial planner is fee based. Meaning he or she charges a fee for their service, it’s fine to pay them directly, but otherwise NO - WAY!!!!

Do they make you feel comfortable? Do you like the person - does your spouse? Trust your instincts once they have answered all your questions.

If the financial advisor meets your criteria and you feel at ease with them - get started.

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Terry Johnston

J C Mitchell Financial Services Inc.
431 Bayview Drive, Suite 1
Barrie, Ontario
L4N 8Y2

Phone:        866-721-7781 ext. 232
Fax:            705-721-1556

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