Financial Planning Professionals

Even after reading this book, or perhaps especially after reading this book, you may want some help from a professional who specializes in financial planning. As with any professional that you go to for advice, you want expertise to help make your decisions, but in the end, you are the one who will certainly have to live with the consequences of your decisions, and you should make your own decisions accordingly.

There are a multitude of financial advisers to help with financial planning, such as accountants, investment advisers, tax advisers, estate planners, or insurance agents. Many financial advisers also work as financial planners. They have different kinds of training and qualifications, different educations and backgrounds, and different approaches to financial planning. To have a set of initials after their name, all have met educational and professional experience requirements and have passed exams administered by professional organizations, testing their knowledge in the field.

Certifications are useful because they indicate training and experience in a particular aspect of financial planning. When looking for advice, however, it is important to understand where the adviser's interests lie (as well as your own). It is always important to know where your information and advice come from and what that says about the quality of that information and advice. Specifically, how is the adviser compensated?

Some advisers just give, and get paid for, advice; some are selling a product, such as a particular investment or mutual fund or life insurance policy, and get paid when it gets sold. Others are selling a service, such as brokerage or mortgage servicing, and get paid when the service is used. All may be highly ethical and well-intentioned, but when choosing a financial planning adviser, it is important to be able to distinguish among them.

Sometimes, a friend or family member who knows you well and has your personal interests in mind may be a great resource for information and advice, but perhaps not as objective or knowledgeable as a disinterested professional. It is good to diversify your sources of information and advice, using both professional and "amateur" subjective and objective advisers. As always, diversification decreases risk.

Now you know a bit about the planning process, the personal factors that affect it, the larger economic contexts, and the business of financial advising. The next steps in financial planning have to do with details, especially how to organize your financial information to see your current situation and how to begin to evaluate your alternatives.

References to Professional Organizations

The references that follow provide information for further research on the professionals and professional organizations mentioned in this chapter.

References to Professional Organizations

Professional Organizations

Websites

The Association of Chartered Certified Accountants (ACCA)

 http://www.accaglobal.com/ca/en.html

The Association for Financial Counseling and Planning Education

 http://www.afcpe.org

Canadian Institute of Chartered Accountants (CICA)

 http://www.cica.ca

Certified Financial Planner Board of Standards

 http://www.cfp.net

Chartered Financial Analyst Institute

 http://www.cfainstitute.org

Financial Planners Standards Council of Canada

 http://www.fpsccanada.org

The National Association of Estate Planners and Councils

 http://www.naepc.org

Table 1.4.1

Key Takeaways

  1. Financial advisers may be working as financial planners, accountants, investment advisers, tax advisers, estate planners, or insurance agents.

  2. You should always understand how your adviser is trained and how that may be related to the kind of advice that you receive.

  3. You should always understand how your adviser is compensated and how that may be related to the kind of advice that you receive.

  4. You should diversify your sources of information and advice by using subjective advisers – friends and family – as well as objective, professional advisers. Diversification, as always, reduces risk.

Exercises

  1. Where do you get your financial advice? Identify all the sources. In what circumstances might you seek a professional financial adviser?

  2. Read the following information from the Financial Consumer Agency of Canada on "Choosing a financial adviser." Which recommendations about getting financial advice do you find most valuable? Share your views with classmates.
Back to '1.1: Setting Short-, Medium-, and Long-Term Financial Goals'