In the roughly 10 years that my wife and I have been together, we’ve been pretty fortunate. We’ve paid off a decent-sized chunk of the mortgage on a beautiful home in a great neighbourhood, we’ve set aside a small but growing retirement nest egg – well, it was growing until the latest stock market nosedive anyway – and, most significantly of all, we have two wonderful children. (Okay, they’re not always wonderful, but we love them endlessly anyway…) And the kids are why we finally decided to get around to a long neglected item on our Big Picture To Do list: book an appointment with a certified financial planner (CFP). So, when do you decide to make that call?
Do you need a financial planner?
If you live alone in a rental place and your “assets” consist of your change dish and those hockey cards you’ve been holding on to because “one day they’re really going to be worth something…,” then, the answer is probably no. (Note: I mock only because I too have a hockey card collection that I’m convinced will one day actually be worth something.)
A reasonable ballpark figure to start with is about $50,000 in savings and other investments. Note though that the best-of-the-best CFPs only handle clients with six or even seven-figures in investments to work with.
In the end, it comes down to asking yourself if you have enough investments that you think could probably be doing better if you had some professional advice? If the answer is yes, then call one.
Up until now, the full extent of “advice” we’d had on financial planning was to fill out the very simplistic questionnaires that banks give you to assess your “risk profile” before they sell you their grab bag of RSP options. As mentioned, with the future needs of our two kids in mind, we wanted to make sure that what amounted to an annual roll of the dice really was the best course of action for us. In order to really understand our goals and needs, our planner will meet with us three times before we do any sort of investing through him.
How do you find one?
Like anything, a word of mouth referral from a trusted friend (ideally one with a more-or-less similar financial position and goals) is best. But don’t feel shy about shopping around. We spoke with a couple different planners before deciding to go with the CFP we’re working with. He’s also a certified management consultant (CMA) and has filed our taxes for us for several years, so we already had an established working relationship that we were happy with.
Run out of leads? The Financial Planning Standards Council has a “Find a Planner” resource on their site that allows you to search by name or city for certified financial planners across Canada.
How much does it cost?
The surprising answer, in some cases, is nothing. Much like working with the rep at your local bank, the planners’ fees are already rolled into the administrative costs factored into a mutual funds’ cost-per-unit.
Depending on the type of investments you’re interested in, other planners may opt to charge you a flat fee per transaction, or a percentage of the amount you’re investing. When you are shopping around for a CFP, it’s important to ask how and what fees they charge, and how those compare with others. After all, you’re trying to make your savings grow, not pad the balance in your advisor’s personal account.
Allan
Writer for RateSupermarket.ca
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