Did you know that in most Canadian provinces and territories financial planning is an unregulated industry? Financial planners are known by various different titles, financial planner, financial advisor, financial consultant and perhaps investment adviser.
In a study conducted by Advocis (The Financial Advisors Association of Canada) last year, most people falsely believe that the title “financial advisor” is regulated and requires some form of professional accreditation.
Now, let’s not get licensing and designations mixed up. A licence is required to sell financial and insurance products, however, there is no minimum education requirement to provide financial advice. Because of the lack of regulation, there is no single registry or database where an investor can go, to verify their advisor’s credentials and disciplinary history. There are also no consistent continuing-education requirements or adherence to a code of ethics.
So how do you go about choosing a financial planner? It’s always a good idea to choose a financial planner that has a designation. Examples of some financial planning credentials include Certified Financial Planner (CFP), Personal Financial Planner (PFP), Chartered Financial Consultant (CH.F.C) and a Registered Financial Planner (RFP)
- CFP – These professionals are equipped to provide financial planning strategies and solutions at all levels of complexity.
- PFP – Offer proven strategies on how to best serve clients’ individual needs through financial planning.
- CH.F.C – A Chartered Financial Consultant (CH.F.C.) is a financial advisor with advanced knowledge in wealth accumulation and retirement planning
- RFP – Shows a high level of competency and professionalism in the field of financial planning.
While all the above designations would assure you that the planner has achieved a certain level of education, is bound by a professional code of ethics and is required to complete a certain number of continuing education hours per year, the most widely recognized designation in Canada and worldwide is the CFP. CFP professionals have the knowledge, skills, experience and ethics to examine an entire financial picture, at the highest level of complexity and work with clients to build a plan.
Of course, education is only one requirement to choosing a planner. You should also consider working with someone that you can relate to, who you feel understands your financial goals, perhaps someone who has similar interests as you and is local to your area – which makes planning more convenient. Working with a planner is always a good option but choose wisely.
This column is written by Michelle Weisheit CFP, IG Wealth Management and presents general information only and is not a solicitation to buy or sell any investments. Please contact your own advisor for specific advice about your situation.