11 Secrets Financial Advisers Want You to Know

Even if you're saddled with debt, a financial adviser can help you work towards your money goals. Before your first meeting, consider these tips.

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Financial advisers - meeting with mature couple
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Not All Financial Advisers Are Equal

In some provinces, “financial adviser” is not a regulated job title. Look for a Certified Financial Planner (CFP) or Registered Financial Planner (RFP) designation, and if they will be handling your investments, choose a reputable Chartered Financial Analyst (CFA).

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Financial advisers - empty wallet
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Don’t Delay

If you’re trying to get out of debt, or sandwiched between dependent children and aging parents, have a seat. “We recognize that financial advisers can take a back burner,” says Vancouver money coach and CFP Sheila Walkington. “But it’s like insurance—get it before you need it.”

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Handshake between two businessmen
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Go Beyond the Usual Suspects

Using your bank’s in-house financial advisers may be convenient. But while their products might suit your needs, they’re limited. It’s best to ask for a referral from family and friends, and don’t be afraid to interview more than one candidate. Look for someone whose clients are roughly in the same financial situation and life stage as you.

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Big bank
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Everyone Gets a Little Intimidated…

One-third of Canadians don’t seek out financial planning advice because they don’t know what questions to ask. Good financial planners expect they’ll need to talk you through complex matters. “There’s a lot of shame associated with money,” says Toronto CFP Robyn Thompson. “But we don’t expect you to be an expert.”

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Financial planning documents
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…But the Initial Discomfort is Worth It

A survey by Canada’s Financial Planning Standards Council found people who have worked with a comprehensive financial plan felt twice as confident that they will have enough money to retire. As a general rule, you’ll need about 70 per cent of your pre-retirement annual income available each year.

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Come Ready to Chat

Good financial advisers will spend at least a couple of hours getting to know you before recommending products or strategies. “We’ll look at your taxes, income, investments, retirement savings, estate planning, insurance, debt and any other issues,” says Thompson. Your planner should check in with you at least once annually.

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Financial advisers - confused client in meeting
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Keep Things Simple

It’s your financial adviser’s responsibility to make sure they clearly communicate concepts to you. If they talk down to you or bewilder you with jargon, bid them adieu. You should also head for the door if your adviser promises to “beat the market”—no one can safely guarantee that.

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Be Honest

Lay out your income and spending, warts and all. “We can bring clarity to your financial habits, and give you tools to help,” says Walkington.

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Financial adviser meeting clients
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Know How Your Financial Adviser Gets Paid

It’s fair to ask whether they receive fees for recommending some products over others, and be sure what you’re buying meets your needs.

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Know Who to Call

If you’re looking for an unbiased approach, fee-for service financial advisers will charge by the hour or project, and they aren’t motivated by commissions to sell you certain products. Similarly, money coaches can help you with financial behaviour, but don’t sell securities.

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Don’t D.I.Y.

Just because you think you can handle your own securities trades, it doesn’t mean you should. Reading headlines about the latest market meltdown can make even the most level-headed investor act rashly. Experienced financial advisers can keep you on an even keel through the market’s ups and downs.

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Reader's Digest Canada
Originally Published in Reader's Digest Canada

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