1 How often do they meet with their clients?
Knowing how often your financial advisor expects to meet with you is important. Your personal situation may change over time, so make sure the company is willing to meet with you frequently enough to be able to update your investment portfolio along the way. The frequency at which advisors meet their clients will vary. You plan to meet with your advisor once a year, but if there were something important you wanted to discuss with them, would they be available for the meeting? It is important that your advisor is always working with the most up-to-date information and fully aware of your situation. When your situation does change, let your financial advisor know.
Ask if you can see a sample financial plan that they have prepared previously for a client.
It is important that you are comfortable with the information your advisor provides to you, and that it is presented in a comprehensive and useful way. While they may not have an existing sample, but they would be able to access one that they have crafted for a previous client and they could share it with you after removing the client-specific information. The following information will help you determine how they help clients achieve their goals. The result will enable you to determine if the results of clients' strategies are in line with their own. Furthermore, if they can demonstrate that they help a lot with planning, it would be a good sign they are doing financial planning and not just investing.
You should learn how the advisor is compensated and how that may translate into any costs you may incur.
Advisors are compensated in a few different ways. Commissions are the most common form of compensation for an advisor. The advisor is paid a fee based upon the client's total assets under management in a second, more innovative form of compensation. Fees for this service are usually calculated on an annual basis and range between 1% and 25%. The same is often true of discretionary, managed stock portfolios. Advisors believe that this will be the norm for compensation in the future. The majority of financial institutions offer the same amount of compensation, but some companies compensate more than others, creating a conflict of interest. By understanding how your financial advisor is compensated, you'll be aware of any recommendations they make, which may be in their best interests rather than yours. It is also very important that they understand how they are compensated and that they can communicate freely with you. An advisor can also be paid up front for investments. A onetime fee is usually calculated on a percentage basis as well; however, the percentage is typically higher, approximately 3 to 5%. Compensation is ultimately determined by a combination of the above. The advisor may switch between different structures or alter them depending on your situation. Investing money with a commission check here from the fund company on a purchase of short term bonds is not the best way to invest short term money. If they invest it with the front end fee, the cost to you will not be higher. It is imperative to understand, before entering into this relationship, whether and how any of the above techniques will cost you anything. Will your assets be subject to another advisor's fees, for example? There are many advisors who will cover transfer costs.
4 Does your advisor hold the designation of Certified Financial Planner?
CFP certification is widely recognized across Canada. By taking the course on financial planning, your planner has shown that he or she has taken an extremely complex course on this subject. Furthermore, it is a way to make sure that you have demonstrated, through success on a variety of different tests, that you understand financial planning and are able to apply this knowledge to a variety of different applications. In addition, these include many aspects of investing, insurance and tax planning. You'll find that your advisor possesses a broader degree of knowledge than the average financial advisor.
5 What designations does the person have that applies to your situation?
You should spend time with a Certified Financial Planner (CFP) looking at your entire financial situation and helping you plan for the future.
CFAs typically spend more time picking stocks. Most of their time is spent selecting and analyzing your investment portfolio. You might find them more useful if you want someone to suggest stocks they feel are hot. In most cases, CFAs have fewer meetings and tend to be more likely to make a phone call to recommend purchasing or selling a specific stock.
CLUs have more comprehensive insurance knowledge and provide more solutions to meet your goals. These professionals provide very good techniques for preserving and passing assets to beneficiaries. CLUs generally meet their clients every year to review their insurance issues. As a result, they will be less involved in investment planning.
Worthy Financial
1959 Upper Water St Tower 1, Suite 1301, Halifax, NS B3J 3N2
+18773653050