Financial Planner
There are a wide variety professionals who fall under the Financial Advisor designation. Some have the primary role of selling mutual funds on a commission basis with little training and no duty of care to put the customer’s best interests first. Others have one or more stringent credentials and are true professionals, responsibly advising clients on a wide range of topics including portfolio analysis, retirement planning, divorce financial planning and estate planning. It is likely that you’ll need some kind of financial advisor at some time in your life.
Some advisors are fee for service professionals who charge by the hour or who have set fees for specific services (portfolio analysis). Others charge clients a set percentage of their assets (eg. 1%) and take responsibility for the entire portfolio. Still others charge a transaction fee for each action they take on your behalf (such as buying a mutual fund).
To make it more likely that your Financial Advisor is looking after your interests, consider one that has received a credential that is related to the service you are interested in receiving. Some of the most popular are:
CFP – Certified Financial Planner
CLU – Chartered Life Underwriter
PFP – Personal Financial Planner
RFP – Registered Financial Planner
CFA – Chartered Financial Analyst
CSA – Certified Senior Advisor
EPC – Elder Planning Counselor
MTI – Member, Trust Institute
Ch.P. – Chartered Professional of Strategic Wealth
The most well-known is the Certified Financial Planner (CFP) designation that has a rigorous program of study and exams. Other designations popular in Canada include the Personal Financial Planner (PFP) and Registered Financial Planner (RFP).
As with any professional, the goal is to find someone who fits with your needs. One good approach is to start with an initial consultation on a hourly fee for service basis and if the fit is right, move to one of the other models if it makes sense for you. Recommendations from family or friends are also helpful.
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