All About Advice

Are financial advisors worth it? Sure.

According to a groundbreaking research reference study, advised households have approximately twice the level of financial assets as their non-advised counterparts, and this advantage grows over time. Studies confirm that Canadians who rely on advice to guide their financial decisions report high levels of satisfaction and trust in their advisor, and credit their advisor with helping them achieve better savings and investment habits.1

Five Steps to Hiring the Right Financial Advisor

Congratulations! You’re ready to start your search. There are thousands of financial advisors across Canada, with a range of qualifications and experience. Here are the five essential steps to finding the right one for you:

Step 1

Do a quick self-assessment

If you are aware of your financial goals, you will be in a stronger position to select the right advisor. Jot down a few details about your near-term and longer-term goals and your attitudes about investing to prepare for a first meeting, using our Quick self-assessment fillable PDF.

Step 2

Build a shortlist of candidates based on word-of-mouth and internet research

Start with your professional network. Your accountant or lawyer may already be aware of your financial situation and needs. They might be able to put you in touch with an advisor with complementary skills. Then turn to friends and family. Ask them if they have a financial advisor that they have had success working with. Your colleagues may also provide good referrals since they may be working with an advisor that specializes in clients from your industry or profession.

Here is a list of useful websites:

The Canadian Securities Administrators website has a search function to find out who is registered in your area, as well as the disciplinary history of your prospective advisor.


Other useful sites have “find an advisor” features and general information to help you understand different advice models:

Step 3

Interview your candidates

It’s best to meet with at least three financial advisors before you make a final decision. When setting your appointment, go to the advisors’ offices instead of inviting them into your home. This allows you to examine their office and business environment. Your Financial advisor question list should cover such areas as the advisor’s background and experience, business practices, products and services and compensation.

Step 4

Check references

After you have conducted your interviews, here are the three things you should check:

  • Background. You can confirm licenses and other credentials by calling the organizations that grant the designations.
  • Disciplinary action. To find out if the advisor has a disciplinary history, check the Canadian Securities Administrators website.
  • References. When you interview a prospective advisor, be sure you obtain a list of the advisor’s current clients who are willing to provide references. If possible, ask for names of clients with situations similar to yours. Your Reference questions should focus on frequency of contact with the advisor, and strengths and weaknesses.

Step 5

Rank your candidates and make your decision

After meeting with prospective advisors and checking their references, it’s time to tabulate your results on the Advisor scorecard. Skill should be the top criterion, followed by trust and open communication. In the end, it’s more important to get good advice than it is to be friends.

Creating a productive relationship

Working with your financial advisor – clear expectations, annual meeting checklist make for a productive relationship. Like any relationship, an advisor-client relationship requires ongoing, open communication with clear expectations set on both sides (see “Responsibilities” below). At a minimum, you will probably meet your financial advisor once a year. To make the meeting a productive one, be sure you have a list of topics and questions ready using this Annual Meeting Checklist.

Your financial advisor’s responsibilities to you

  • Act in your best interest
  • Answer questions
  • Identify opportunities and make appropriate recommendations
  • Confirm expectations and investment needs
  • Disclose compensation
  • Discuss risks associated with recommendations
  • Observe and adjust strategy
  • Recognize problem areas
  • Recommend other professionals/experts
  • Report regularly
  • Respond quickly

Your responsibilities to your financial advisor

  • Ask questions
  • Be committed to achieving your goals
  • Disclose information
  • Express your risk tolerance
  • Go to your meetings prepared
  • Keep advisor up to date on your situation
  • Keep documentation
  • Provide feedback about advisor’s services
  • Respond quickly
  • Stay informed about your investments
insights

Understanding the performance of your investment account

This animated video helps investors understand the report on investment performance introduced as part of CRM2.

 

3 minute read August 24, 2017

Understanding the costs of your financial advisor

This animated video helps investors understand the value of advice and the costs associated with financial advice.

 

3 minute read August 4, 2017

Understanding the costs of investment funds

This animated video helps investors understand the costs of buying, owning and selling their investment funds.

 

3 minute read January 24, 2017

Understanding the costs of investments funds (fee-based accounts)

This animated video helps investors understand the costs of buying, owning and selling investment funds within their fee-based account.

 

2 minute read January 24, 2017

Additional Resources

Source: The Gamma Factor and the Value of Financial Advice. CIRANO (2016).
1 Source: Canadian Mutual Fund Investors’ Perceptions of Mutual Funds and the Mutual Fund Industry, IFIC, 2016