Financial Planners
SUMMARY: A financial planner should be able to provide the following: a clearly written plan, in language you can understand, containing a balance sheet of assets vs. liabilities; an explanation of goals with advantages and disadvantages of any course of action; options and alternatives for all investment choices as well as the risk estimated in each investment objective; specific suggestions for improving your personal cash flow; projections for shifts in the rate of interest, inflation, and other situations that will affect your future; a plan for liquidity in the event of emergencies; and a schedule for reviewing your financial progress. The Bureau suggests that you carefully check out the financial planner's credentials before proceeding with your plan.
In B.C., financial planners are not regulated. As anyone can say he or she is a financial planner, you need to be cautious and check out the person's credentials.
WHEN CHOOSING A FINANCIAL PLANNER THE CONSUMERS' ASSOCIATION OF CANADA SUGGESTS ASKING THESE QUESTIONS:
1. What is the method of compensation?
2. Does the planner receive incentives for selling certain products?
3. Is the planner affiliated with any particular firm, perhaps a life insurer or mutual fund company?
4. Will the planner provide a full disclosure statement as part of a retainer or engagement letter, or as a separate statement, before the client undertakes any obligations?
5. What are the planner's credentials, education and level of experience?
6. What is the full range of financial products that the planner's firm can offer?
7. Will you get a full written plan? What will it cover?
8. Can you see a sample plan done for a client in a situation similar to yours?
9. Will the planner provide client references?
10. Does the planner have liability insurance?
11. How much will the service cost? It may be unrealistic to expect more than a ball park figure or range from an initial meeting.
12. Who will you work with? If associates will be involved, insist on meeting them.
13. How often will you meet? For how long? Will you be charged for each phone call?
14. Is the firm a member of the Canadian Investor Protection fund, which protects investments up to $500,000?
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