August 02, 2016
For the latest scoop on trends and advice surrounding financial planning and investments, Rob Carrick makes for a good read. He covers a lot of ground through his blog at the Globe and Mail. Recently, he wrote about the hesitancy of many Canadians to pay fees to financial specialists for the wisdom they can impart. He believes people ought to rethink the matter, and I heartily agree with him.
Fee-based financial advisory services are well worth paying for if people choose their advisors and counsellors wisely, be it specifically for investments or for general personal financial planning and budgeting. Let’s just keep in mind that, generally speaking, advisory fees are small in relation to prospects for the long-term financial security of any family or individual. Perhaps the whole issue of paying for financial advice simply comes down to this: how much do we as Canadians value long-term peace of mind?
The price to pay for advisory services might come as a surprise, especially when it’s put into the context of long-term benefits.
I suspect the issue also has to do with education. A lot of people aren’t quite sure what to make of financial specialists. The field seems to smack of high finance or something that applies mostly to the well-to-do. But, as I say, the price to pay for such services might come as a surprise, especially when it’s put into the context of long-term benefits. Here I offer a primer that might help lift the mystique surrounding these specialists by defining who they are, what they do, and how they charge.
Financial specialists come by many general titles, from financial planners and financial advisors, to financial counsellors or, in friendlier terms, money coaches. Some specialize in certain areas (e.g. investments, insurance, taxation, retirement planning). Others are generalists who can help with overall goal setting, budgeting, and investments.
Seek a specialist who is objective about your needs and who has no conflict of interest in the investments being recommended.
Before seeking aid, you must understand what it is you want out of a specialist. Do you require all-embracing financial advice? Do you need help with saving and goal setting? Do you want to initiate or review a retirement portfolio or set up an education fund? Do you need pointers about tax breaks or advice about investments in, say, mutual funds? Particularly in relation to investment advice, you should seek a specialist who is objective about your needs and who has no vested interest or conflicts of interest in the investments being recommended.
Above all, your specialist must be skilled as an expert with good references. It’s always wise to ask around among family, friends, and associates about professional services that are trustworthy. It’s often better to get some first-hand suggestions before scouring the Internet. Meanwhile, you can contact the Financial Planning Standards Council a not-for-profit organization which develops, promotes and enforces professional standards in financial planning through Certified Financial Planner® certification, and raises Canadians’ awareness of the importance of financial planning.
Keep in mind that in the financial services industry there is no shortage of certifications, designations, and abbreviations.
As you talk to others, keep in mind that in the financial services industry there is no shortage of certifications, designations, and abbreviations. By understanding what the designations mean, you will be better equipped to choose the professional best suited to help you.
Familiarize yourself with this list of designations:
Note that this is just a partial list of the many different designations found in today’s financial marketplace. Some specialists may have multiple designations.
Any reputable financial specialist will hold an introductory meeting with you at no cost. This is your opportunity to explain your situation.
Here’s how fees can be administered:
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