How to choose a financial advisor

Choosing a financial advisor is one of the most important decisions you’ll make in your lifetime. From paying off debt as efficiently as possible to saving for your dream retirement, expert advice helps guide us from where we are to where we want to be.A good financial advisor can help you build a strong financial pyramid, plan for your family’s future, maximize tax savings and ensure your portfolio is well-diversified for the best returns.

With all the advice available online, it can also be tempting to think that it’s easy enough to manage your own money. However, based on research, analysis and many scientific tests, there is quantifiable evidence that clients greatly benefit from working with a professional advisor. People who work with advisors report having greater confidence in their financial futures.

A professional can help you create a rewarding roadmap for your financial future. To do this, they should consider all aspects of your finances, ask questions about your life and check in with you regularly to make adjustments as things change. Advisors are either fee-based, meaning they collect a pre-stated fee for services, or commission-based, meaning they earn a percentage of income earned form the management of the account.

Working with a financial advisor is all about building trust. During strong markets and turbulent times, an advisor will help you understand the markets, time for short- and long-term goals and, perhaps most importantly, help keep your emotions in check. When a professional knows your entire personal and financial situation, they can help you stay on track and reach your goals.

So, how do you choose which financial professional to work with?  

• Financial Advisors: Manage your cash flow efficiently, create comprehensive debt repayment structures, implement investment strategies for retirement and ultimately work to grow your savings. Both financial planners and senior financial advisors have a special focus in investments, taxes, retirement and estate planning. The main goal of a financial advisor is to manage and budget your finances, now and for the future.
• Wealth Advisors: Specialize in comprehensive financial advice. They work to grow and protect your wealth. They provide solutions for cash management, credit planning and investments.
• Senior Wealth Advisors: Specialize in advising and implementing sophisticated wealth strategies and investment portfolios.
  
  In Canada, these financial professionals can be referred to as investment advisors, financial consultants and more. Wealth advisors or by any name they act under, invest capital to secure a client’s financial future. Financial Advisors should belong to a regulatory agency:
  • The Investment Industry Regulatory Organization of Canada (IIROC), regulates all investment dealers in Canada. IIROC monitors financial institutions and enforces rules and regulations around operations, financial practices, business conduct and proficiency of its members.
  • The Mutual Fund Dealers Association of Canada (MFDA) is the national self-regulatory organization (SRO) for the distribution and sales of the mutual fund industry. It is responsible, like IIROC, for regulating the business practices, standards of practice and business conduct of its members. These advisors differ from IIROC advisors because they can only use mutual funds and GICs for their clients.
• Wealth Planning Specialists: Experts in financial planning and focus on ensuring that your plans are on track. They have extensive experience with investments, retirement, estate planning and businesses transition planning. They provide solutions for complex needs to ensure you are financially secure now and in the future.
• Life Insurance Advisors: Often life insurance advisors are also wealth planning specialists, or they work closely together. These professionals are experts in comprehensive estate planning, tax minimization and strategies that protect your wealth. They are focused on making sure that your plans are on track, no matter what life changes you may go through.
• Commercial Banking & Business Banking Advisors: Expert partner for your business needs. They will help you find capital solutions, secure financing (including construction and term), consult on risk management and mitigation.  These experts are dedicated to finding the solutions that will help your business continue to grow.

Here are a few things to consider when choosing a financial advisor:

Credentials: There are many acronyms to consider. The initials in front of titles reflect the education and certifications that different advisors have. The different expertise is important to understand as credentials can inform you of education and experience and how they might align with your life goals. Make sure you check what you’re getting with each professional by taking a look at the guide to our financial designations and credentials.

Fit: Ensure that the advisors you are considering working with share the same morals and ethics that you do. Each advisor will have a different style and approach to investing. Most offer a free consultation, so use this time to ask them as many questions as they ask you. An advisor is going to know the intimate details of your life and financial situation; be sure they tell you details of their practice and philosophies.

Trustworthiness: This is a very important consideration when working with a financial expert as your money affects every part of your life and you need to have trust in the person handling your investments.

Fiduciary duty: The most important of all is to check that the financial professional you are working with is bound by fiduciary duty. This means that they are required by law to work in your financial best interest.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.