Question: What experience do you have?

Answer: Experience is an important consideration in choosing any professional. Ask how long the planner has been in practice, the number and types of firms they have been associated with, and how their work experience relates to their current practice. Inquire about what experience relates to their current practice. Inquire about what experience the planner has in dealing with people in similar situations to yours and whether they have specialized training. Choose a financial planner who has a minimum of two years counseling individuals on managing their finances.

Question: What services do you offer?

Answer: The services a financial planner offers will vary and depend on their credentials, registration, areas of expertise and the organization for which they work. Some planners offer financial planning advice on a range of topics, but do not sell financial products. Others may provide advice only in specific areas such as estate planning or taxation.

Those who sell financial products such as insurance, stocks and bonds and mutual funds, or who give investment advice, must be registered with provincial regulatory authorities and may have specialized designations in those areas of expertise. For a helpful list of Acronyms and Designations used in the financial services industry and their meanings, visit www.cfp-ca.org

Question: What is your approach to financial planning?

Answer: The types of services a financial planner will provide varies from organization to organization. Some planners prefer to develop detailed financial plans encompassing all of a client's financial goals. Others choose to work in specific areas such as taxation, estate planning, insurance and investments. Ask whether the individual deals only with clients with specific net worth and income levels and whether the planner will help you implement the plan they develop or refer you to others.

Question: How are you compensated?

Answer: Your planner should disclose in writing how they are paid for the services they provide. Planners can be paid in several ways:

• COMMISSIONS: The advisor is compensated if you purchase financial products to implement a financial planning recommendation. In some cases the commission is paid by the suppliers of financial products.
  
  In other cases you pay the commission, for example, if you buy shares of a publicly traded company. Commissions are usually a percentage of the amount you invest.
  
  
• SALARY: The company which employs the planner pays them a salary. The planner's employer may get its revenues from fees paid by clients or commissions paid by clients making a purchase, or by the suppliers of financial products.
  
  
• FEE-FOR-SERVICE: Advisors paid on a fee-for-service basis may charge an hourly rate, set a flat rate for a specific service or be paid a fee based on a percentage of assets or income.
  
  In some cases compensation is a mix of fee and commission. You should also ask if the planner or organization receives any benefit other than commission, such as advertising and promotion subsidies from suppliers of financial products.

Question: How much do you typically charge?

Answer: While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work performed. Such costs would include the planner's hourly rates or flat fees or the percentage they would receive as commission on products you may purchase as part of the financial planning recommendations.

Question: Is the advisor regulated by any organization?

Answer: Financial planners who sell financial products such as securities and insurance or who provide investment advice are regulated by provincial regulatory authorities and may also subscribe to a code of ethics through a professional association. Others who are members of the accounting and legal professions are usually members of professional bodies that govern their fields. Planners who hold the CFP designation are subject to disciplinary proceedings of Financial Planners Standards Council. It is a fair question to ask if they have ever been the subject of disciplinary action by any regulatory body or industry association. You can verify the answer by contacting the relevant organization. Ask the financial planner whether they subscribe to a professional code of ethics such as the Certified Financial Planner Code of Ethics. You can view the CFP Code of Ethics in full at www.cfp-ca.org

Question: Could any one besides me benefit from your recommendations?

Answer: Ask the planner to provide you with a description of their conflicts of interest in writing. For instance, if there is any business relationship with the companies or ownership interest in any company that supplies financial products sold by the planner and the planner's employer.

Question: Can I have it in writing?

Answer: Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.

For more information, contact:

FINANCIAL PLANNERS STANDARDS COUNCIL
1600-505 University Avenue
Toronto, ON M5G 1X3
Phone (416) 593-8587
Fax (416) 593-6903
E-mail inform@cfp-ca.org
Web site www.cfp-ca.org

CFP and Certified Financial Planner certification marks are used by FPSC under license agreement with the CFP Board of Standards, Inc.