byDouglasGray
As a business owner, you need to juggle a lot of balls to survive. One key
aspect is what you do with the money you have left at the end of the day.
Since you are going to have to rely on your own wits, savings discipline
and investment success for your own retirement, you need and want to get
objective professional advice.
So where do you find it?
When you are choosing a financial planner, keep in mind that anyone can
call himself or herself a financial planner, financial consultant, financial
adviser, etc. However, they could just be sales reps selling investments
or other products for a commission. No federal, provincial (except in Quebec),
or local laws require qualifications such as those imposed on other professionals,
including accountants and lawyers.
There are several ways of locating a financial planner. One of the most
effective ways is to contact the Canadian Association of Financial Planners
(CAFP) head office in Toronto. The toll-free number is 800-346-CAFP (or
800-346-2237). All members of CAFP must have professional liability insurance.
The CAFP will give you the contact phone number for the chapter in your
province. By contacting this number, you will be sent a free publication
called A Consumer Guide to Financial Planning. You will also be sent
a roster of members who have been awarded the Registered Financial Planner
(RFP) designation in your province. This list shows experience, credentials,
and services provided, lists any financial products sold, and states the
method of payment-for example, fee for service, commission, or both.
After you've decided to seek the services of a financial planner, you may
have other questions: Which professional is right for me? How do I identify
a competent financial planner who can assist in coordinating the key aspects
of my financial planning life?
Just as you select a doctor or lawyer, you should base your decision on
a number of factors: education, qualifications, experience, integrity, ethics
and reputation.
When selecting your financial planner, choose one you can work with confidently.
You are asking this person to help shape your financial future and quality
of life in retirement, and you are paying him or her to do so. It is your
responsibility and right to fully inquire about the planner's background,
numbers of years in practice, credentials, client references, and other
relevant information.
Call the planner and ask for a meeting. Use this opportunity to get a sense
of your compatibility and to discover exactly how the planner will work
with you. Ask questions about financial planning that will give you a basis
for comparison with other planners you have contacted. In short, get the
information you need to feel confident that this person is right for you
and your needs.
By asking the following questions, you should get the information you need
to make a decision on which financial planner to hire. As you think of other
questions, add them to your list. Keep in mind how the answers fit your
personal needs.
Does the planner offer comprehensive financial planning services and how
long has he or she been doing so?
What did the planner do before becoming a financial planner?
What are the planner's areas of expertise and what services does he or she
provide?
What type of clientele does the planner serve? Does he or she have particular
skill in understanding the many needs of a small business owner?
Will the planner show you a sample financial plan that he or she has done
for another business owner? (Without, of course, disclosing confidential
information or client names.)
Does the planner just give financial advice, or does he or she also sell
financial products?
Will the planner's advice include only generic product categories or specific
product recommendations?
Will the planner spend the time explaining his or her reasons for recommending
a specific product and how it suits your goals, circumstances and tolerance
for risk, and put it in writing?
What follow-up does the planner do, to make sure that your financial plan
is implemented? How often is it reviewed and revised?
How is the planner compensated?
Are there any potential conflicts of interest in the investments the planner
recommends?
What professional licences and designations has the planner earned?
What professional liability insurance coverage does the planner carry for
negligent advice and how much is that coverage? Will he or she confirm that
in writing?
Once again, it is recommended that you meet with at least three financial
planners before you make your final selection. To work effectively with
a planner, you will need to reveal your personal financial information,
so it's important to find someone with whom you feel completely comfortable.
Douglas Gray, LL.B. is a Vancouver-based speaker, retired lawyer, columnist
and author of l5 bestselling business books, plus a real estate investment
software program. His books include The Complete Canadian Small Business
Guide, Home Inc.: The Canadian Home-Based Business Guide (both by McGraw-Hill
Ryerson), Start and Run a Profitable Consulting Business and Marketing
Your Product (both by Self-Counsel Press).
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