Many people work with an advisor to help
them reach their financial goals.
An advisor can help you:
- Set your financial goals
- Build a budget and financial plan
- Choose appropriate investment products
- Monitor your investments and adjust your plan when needed
A wide range of firms and individuals offer many different kinds of products and advisory services. Their skill and experience levels, areas of expertise, and even the fees they charge can vary a lot.
Be sure you choose an advisor who can help you meet your needs.
Beware – The term “advisor” is sometimes used by salespeople who are trained and licensed to sell you only one type of financial product. They are not an “advisor” in the way most people would understand that word. Be sure you understand who you are dealing with, and what they can, and cannot, help you with.
Choosing an advisor who is right for you
You’ll need to do some research when choosing an advisor who is right for you. It’s worth your time.
Start by asking yourself some questions:
- What kind of advice do you need? Are you looking for investment advice on what stock to buy, or do you want to build a comprehensive financial plan?
- How strong is your financial knowledge? Do you need an advisor who offers a range of financial products and services? Or do you only want help to trade stocks?
- How much are you planning to invest? Some advisors require you to have a minimum amount to invest. Usually, the more money you have to invest, the more services you will get.
It is important to interview potential advisors and select one who will help you meet your goals. Picking the right advisor can mean the difference between achieving your financial goals or seeing your financial goals slip away.
Finding an advisor
Where to find a financial advisor will depend on the type of advice you need.
- Independent financial planning companies or consultants can help you review your financial needs and help you make a plan to reach your goals.
- Stockbrokers and mutual fund dealers are licensed individuals who can help you buy or sell investments such as stocks, bonds, exchange traded funds (ETFs) or mutual funds.
- Banks, credit unions and caisses populaires have staff who can help you understand and buy certain types of investments, such as term deposits, guaranteed investment certificates (GICs) and mutual funds.
- Insurance companies have employees licensed to sell investment products such as mutual funds, segregated funds and annuities. They also offer various types of insurance products.
To find an advisor who can give you the advice you are looking for, ask family, friends, and colleagues for referrals. Most people are happy to provide referrals. However, don’t just take their word—make sure you meet with the individual and form your own opinion of whether the advisor is right for you.
You can also search for advisors on the websites
of investment industry groups such as:
Investment Industry Regulatory Organization of Canada (IIROC)
Mutual Fund Dealers Association (MFDA)
Chambre de la sécurité financière (CSF)
Institut québécois de planification financière (IQPF)
Portfolio Management Association of Canada (PMAC)
Questions to ask
Once you have a short list of advisors or firms you want to interview, develop a list of questions to help you choose the one that is right for you.
Here are some sample questions to ask:
- What are your qualifications?
- Are you licensed to provide advice and by whom?
- What kind of experience do you have?
- What products and services do you offer?
- How often will you communicate with me?
- If I become a client, how often will you monitor my account?
- How are you paid?
It is important to interview potential advisors and select one who will help you choose investments that match your risk tolerance and investment goals.
Check if an investment advisor is registered
If you decide to work with an investment advisor who deals with products like mutual funds, stocks, or bonds, they must complete training and be licensed (registered) with a provincial or territorial securities regulator, or through a self-regulatory organization (like IIROC or MFDA).
Check with your local securities regulator to see if a firm or individual advisor is registered and whether they have a record of any disciplinary action against them. Don’t worry—it only takes a minute to check. You can search for an advisor or a firm here.
Paying your investment advisor
If you plan to work with an investment advisor, it’s important to understand how the advisor is paid. Some advisors get paid a commission each time they buy or sell an investment for you. Others get paid a fee based on how much you invest. Fees can have a real impact on how long it takes to achieve your financial goals.
Learn more about investment fees.
While most investment advisors try to give good advice, some may be influenced by other factors. For example, an investment advisor may receive extra fees for selling you certain products and not others. It is important to be aware of this and ask your advisor questions about the different fees you will have to pay before you start investing.