Working with a financial advisor

Constructing a financial plan that will help achieve your goals takes time, interest and knowledge. Most investors find it helpful to work with a professional financial advisor who has the experience and resources to provide expert guidance in developing and maintaining a financial plan.

Financial advisors can help you achieve your goals by performing vital tasks such as:

  • Improving financial literacy
  • Developing culture of savings and investment
  • Helping to develop and execute a financial plan
  • Selecting appropriate financial products
  • Improving investment decision-making

Here are five steps to help you find, hire and start working with an advisor

1. Get to know your financial picture

Understanding your financial situation is a critical first step in choosing a financial advisor. Here are a few considerations:

  • Financial goals — Are you looking to buy a first home, save for your child’s education or perhaps develop a retirement plan? The financial plan you build with your advisor will largely depend on your goals and your unique stage in life.
  • Assets — Which accounts do you keep your money in? Take inventory of all your retirement and non-retirement financial assets. Your net worth will also be a key factor in choosing an advisor, as some financial professionals set minimum investment levels.
  • Income, expenses and debt — Where does all your money go? While it’s relatively easy for most of us to gauge monthly income, tracking spending (especially discretionary spending) can often be a daunting task. By examining your cash flows and tracking your savings habits, you can develop a sound financial plan.

Before you look for a financial advisor it’s important to do some personal homework. Having a general idea of where you expect an advisor to help is a good place to start. The Advisor services checklist in our Toolkit can help you determine this.


2. Find the right type of advice

Once you have a basic understanding of your financial situation, it’s time to think about the kind of services you’ll require from your advisor.  For example, are you just looking for investment advice or will you require more specialized services, like tax or estate planning? When thinking about services, it’s also important to consider your level of investment knowledge and how involved you want to be in planning and making investment decisions.

Advisors differ in terms of the services they provide, the products they can offer, how they’re paid and their professional designations.

Financial planner

Financial planners offer advice and guidance covering the complete personal financial spectrum, including saving and investing, insurance, retirement and estate planning and taxation.

Insurance agent/broker

While these advisors generally specialize in life insurance and annuities, they may also be licensed to sell mutual funds and securities.

Investment specialist

Investment specialists focus on investment planning and wealth management.

Broker/investment advisor*

Specialists in developing and implementing investment plans and strategies, these financial professionals have also been branching out into other areas of financial planning.

* Also known as financial consultants, investment representatives or investment executives

Investment manager/portfolio manager

These advisors provide investment-planning and discretionary portfolio management services based on guidelines and objectives set out by the client.

Regardless of which type of advisor you choose, be sure to consider:

- Services provided

- How they’re paid

- Professional designations/regulatory bodies

Read in-depth descriptions of the various types of financial advisors 



3. Select an advisor

With a basic understanding of your financial situation and the types of advisor services available, it’s now time to begin your selection process. How do you find an advisor?

Consider the following sources to find advisors:

  • Get referrals from people you trust, such as family, friends and colleagues.
  • Leverage the internet with websites like Google and LinkedIn.
  • Ask other professionals, such as your lawyer or accountant.
  • Attend educational events hosted by financial professionals.
  • Contact industry associations for recommendations.
  • Check the Better Business Bureau and your local Chamber of Commerce for possible candidates.

Once you’ve put together a list of potential candidates, you’ll need to do your due diligence. Here are five steps you can take to help you evaluate your candidates:

1. Check references and credentials. Contact your provincial Securities Commission and Insurance Commission, to see if any complaints have been made against the advisor.

2.Interview. Personality and rapport are as important in making your selection as expertise. Meeting face-to-face will allow you to see whether you would be comfortable working with that person.

3. Prepare questions. Questions for advisors worksheet can help you do this. Be prepared to answer questions from the advisors on what you expect.

4. Prioritize the needs you identified in the Advisor services checklist; then rank the candidates on the basis of how they meet those priorities.

5. Consider how the conversations went during your interviews. Did you feel at ease? Were your questions answered satisfactorily? Were you comfortable providing personal information about yourself?

Taken together, all this information should lead you to choose the advisor best suited for your needs. Call the advisor to arrange your first planning meeting and contact the other candidates to thank them for their time and assistance.


4. Build a strong working relationship

The relationship with your advisor will require a clear and honest exchange of information. The following tips and suggestions can help you develop a productive working relationship.

Restate your expectations

Be clear about your service expectations and understand what your advisor expects from you. Use the Responsibilities review list as a starting point.

Practice full disclosure

You need to provide all of your financial information and expectations if you are to benefit from the full value of your advisor’s expertise.

Fostering open communication

Be open and honest with your advisor. Be receptive to new ideas and suggestions, ask questions when you need clarification, and voice any concerns you might have.

Come to each meeting prepared

Bring all relevant information to every meeting. The Financial needs checklist is a good guide to use.  Also, bring

  • a statement of value for real estate, collectibles or other important assets
  • your most recent tax assessment form
  • details of any liabilities – mortgages, loans, lines of credit, credit card balances
  • your will and power of attorney documents

Ask questions

Make sure you completely understand the financial concepts your advisor is recommending. Ask for clarification if you don’t understand something. There are no trivial questions when it comes to your money. And if you don’t agree with a recommendation, or have other concerns about your financial progress or the management of your account, say so. After all, it’s your financial future.


5. Review your financial plan

After your plan is in place, you will continue to work with your advisor to monitor the plan’s progress and to make adjustments as needed. Ongoing communication is important, whether in person or by phone, email or monthly statements. Having a face-to-face meeting at least once a year to review your progress and discuss any changes in your financial needs and goals is recommended. The Meeting checklist can remind you of specific issues you wish to discuss.

There are many predictable changes and special circumstances that will occur as you move through the various stages of your life. Most of these can be dealt with during an annual review meeting. The Financial changes by life stage checklist will give you an idea of the things you may need to discuss with your advisor at some point.

Sudden and unexpected changes can occur that will affect your lifestyle and financial needs. You should inform your advisor when any of these occur:

  • changes to your employment status, income, tax situation
  • changes in your family situation – marriage, children, separation, divorce, death of a partner
  • receipt of an inheritance
  • deterioration in your health

You should always contact your advisor whenever you have concerns about investment markets, sudden economic changes or anything else you think could affect your portfolio. Part of the value you receive from working with an advisor is having someone look after your portfolio who has an expert understanding and knowledge of investment markets and economic conditions. Your advisor should be an excellent sounding board and a voice of reason who will help you make decisions based on what is best for your long-term plan, rather than emotional reactions to the daily news.


working with advisor

Working with a Financial Advisor toolkit

Email me the toolkit

The Working with a financial advisor toolkit includes:

  • Advisor services checklist
  • Checking references
  • Financial changes by life stage
  • Financial needs checklist
  • Meeting checklist
  • Questions for advisors
  • Responsibilities review list

* Also known as financial consultants, investment representatives or investment executives