How to choose a financial advisor

While most people make an appointment for a specific purpose, our professional experience as financial planners provide us a strong ability to uncover many issues our clients were previously unaware of. While you might have booked the appointment because you only need investment advice, meeting with a financial planner who asks deep, probing questions might uncover issues or opportunities that you didn’t even know you had.

If you’re looking to choose a financial advisor, we have compiled the below list of 7 key steps you should follow. We’ll elaborate on all the elements involved in more detail below.

  1. Understand what different advisors are qualified to do.
  2. Make sure you’re collaborating with a reputable firm.
  3. Make sure their title means what you think it means.
  4. Look at the letters after their name to understand their qualifications.
  5. Consider choosing a financial planner for the most comprehensive advice.
  6. Ask about fees; an advisor should be proudly transparent about the fees they charge.
  7. Ask friends and family if they feel they’re getting fair value for their fees.

Firstly, what is a financial advisor?

The title “financial advisor” is an unregulated term in most of Canada. In most provinces, anyone can call themselves a financial advisor, and there are no regulated educational requirements. Times are changing however, and Ontario and Saskatchewan have begun implementing regulation to the term. For example, in Ontario the new regulations specifically state what the educational requirements are to use the term. However, reputable firms will impose educational requirements on their advisors regardless of regulation. Different firms will have many different offerings. Some examples of offerings are financial planning or personal financial planning, wealth management and portfolio management. Then, there’s the title of the specific advisor with whom you’ll be working.

Below is a list of some common titles you’ll see:

Financial planner

The term financial planner also used to be completely unregulated in Canada, but times are changing. The province of Ontario’s Financial Services Regulatory Authority of Ontario (FSRA) has recently introduced regulation of this term along with the term “financial advisor”. FP Canada is an approved certifying body, so you can feel confident that an advisor holding the CERTIFIED FINANCIAL PLANNER® (CFP®) or QUALIFIED ASSOCIATE FINANCIAL PLANNER (QAFP™) designations has had adequate education and supervision to provide financial planning. Other designations approved by the FSRA in Ontario are on their website.

Investment advisor

In Canada, the term Investment Advisor is not a designation or certification, but a job title that is often granted to an individual working with an investment firm that is regulated by the Investment Industry Regulatory Organization of Canada (IIROC). Both the firm and the individual are required to hold IIROC registration, in order to sell and provide advice about many different investment products.

Wealth advisor

This term is a job title that Wellington-Altus Private Wealth grants based on certain criteria. These include being registered with IIROC to provide investment advice and also holding an approved financial planning designation.

Portfolio manager

Portfolio managers (PMs) don’t just provide investment advice, they can also make discretionary trades on your behalf. Advisors advertising their registration as PM’s must hold either the Chartered Financial Analyst (CFA®) or Chartered Investment Manager (CIM®) designations.

Financial coaches

These coaches go by many titles, and they aren’t traditional advisors. Typically, these coaches will help people get better at budgeting, increasing their savings and building good financial habits.

A word on accountants

Most accountants only provide tax advice, and it’s important to remember they see the world through that lens. There’s a lot of other considerations to financial advice beyond taxes.

Which professional to pick

So, which of those advisors should you pick? What if you don’t know what you need help with? Some websites suggest you should know what you need help with before booking a meeting, but we disagree. The trouble with personal finance is that most people don’t know what they don’t know. When people are laying awake at night, their most worrying question is “am I missing something?” and we find this to be true so often. Many Investment Advisors and Portfolio Managers are also financial planners or work alongside them. Therefore, choosing a financial planner who meets these criteria could be a good first step on your journey to uncover all potential issues.

While most people make an appointment for a specific purpose, our professional experience as financial planners provide us a strong ability to uncover many issues our clients were previously unaware of. While you might have booked the appointment because you only need investment advice, meeting with a financial planner who asks deep, probing questions might uncover issues or opportunities that you didn’t even know you had.

While many people only reach out for investment advice, a financial planner can make sure you’ve also covered the other critical areas: financial management, insurance & risk management, tax planning, retirement planning & estate planning.

Fiduciary duty

What about fiduciary duty? This is something you’ll often see mentioned on US-based websites, but applies in Canada as well. An advisor with a fiduciary responsibility has a legal obligation to put the client’s interest ahead of their own. Members of FP Canada (which grants the CFP® and QAFP™ designations) are required to act as fiduciaries for their clients.

The individual advisor

In order to determine investment suitability, IIROC registrants in Canada are required to ask for personal information, which usually includes your full name, age, date of birth, employment status, income, your net worth including assets and debts and marital status including spouse’s information. However, this checklist doesn’t necessarily capture all the important aspects of your financial situation.

How can you tell if your advisor is a good one without knowing if they’re a financial planner? Well, do they ask you about your existing investments? Do they ask about your family, your goals & dreams? Do they ask you about your existing insurance policies? Do they request copies of your Notices of Assessments from CRA, your work group benefits booklet, your wills? If not, this may be an indication that they may not be considering the full scope of financial needs.

The advisor should also be warm and easy to talk to. Finances are highly personal, and a personal connection can uncover so many more problems and solutions that a cold or impersonal advisor might not be able to. Most websites suggest meeting with multiple advisors, and that can be beneficial, unless you feel a connection with the first one. Financial advice is highly personal so a personal connection can make a substantial difference.

Fees

There are three main ways an advisor is compensated:

Fee for service/hourly

There are great reasons for choosing an advisor who is compensated hourly or per plan. There are also some great reasons for choosing other fee structures:

  1. The up-front cost prevents many people from starting a financial plan in the first place.
  2. People often don’t complete the action steps provided by the planner. Once the planner has provided a plan, there’s no financial motivation for the planner to ensure all the action steps are completed.
  3. Having access to financial advice without an extra bill means people reach out for advice more often, which increases the likelihood of making good financial decisions.
  4. The advisor has no extra financial incentive to build the client’s net worth.

Fee-based

In this account type, clients are charged a set percentage annual fee based on the size of the assets under the advisor’s administration. As the client’s investment account grows, the advisor will generally see an increase to their compensation. These fees are very clear and may be tax-deductible in non-registered accounts.

Commission-based

In this account type, advisors can receive an up-front transactional commission on the buy or sell of a particular quantity of securities. This amount is negotiable and is often between 0% and 5% of the purchase amount. The Sweeney Bride Strategic Wealth team charges 0% transactional commission for mutual fund trades.

It is important to note that certain products may have additional fees embedded in them. These fees are separate from any transactional commissions or annual fees based on account value.  For example, the Sweeney Bride team’s compensation with accounts of this type often comes from some mutual funds that pay a “trailing commission” to an investment firm.

Our team was glad to see that trailing commissions were banned for firms that don’t provide advice as of June 1, 2022. Does that mean all trailing commissions paid to firms should also be banned? Not at all. In fact, these trailing commissions can provide you access to a financial planner that provides ongoing financial advice. Whether that’s a change of investment strategy, job change advice, or tax planning advice. For perspective, compare this to the cost of keeping a lawyer “on retainer” for legal advice on demand.

Determining value in fees

How do you know if the fee-based charges or trailing commissions are good value? Ask your friends and family if they’re happy with the value they’re receiving from their fees. Also, ask the advisor! They should be able to enthusiastically explain the value in their fees.

Determining value in fees

How do you know if the fee-based charges or trailing commissions are good value? Ask your friends and family if they’re happy with the value they’re receiving from their fees. Also, ask the advisor! They should be able to enthusiastically explain the value in their fees.

Who’s right for you

Once you’ve decided you’re ready to meet with an advisor, make sure to ask for recommendations from a friend or family member you trust, and also make sure to dig into why they recommend that advisor, so you know if the advisor is providing value that you care about.

Sweeney Bride Strategic Wealth Advisory is a financial planning team. We have four advisors in the office who are all CERTIFIED FINANCIAL PLANNER® professionals as well as registered with IIROC-to provide advice on security selection. We are always happy to meet with those interested in becoming clients. Reach out to us here to book a gratis meeting to see if we’d be a good fit to work with you or your family.

 

The information contained herein has been provided for information purposes only.  The information has been drawn from sources believed to be reliable.  The information does not provide financial, legal, tax or investment advice.  Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance.  This does not constitute a recommendation or solicitation to buy or sell securities of any kind.  Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions.  Before acting on any of the above, please contact your financial advisor.  WAPW is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. 

© 2022, Wellington-Altus Private Wealth Inc.  ALL RIGHTS RESERVED.  NO USE OR REPRODUCTION WITHOUT PERMISSION.

www.wellington-altus.ca

The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus. Wellington-Altus Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. All trademarks are the property of their respective owners.

SHARON FIELDS

Administrative Assistant

Sharon worked for Sweeney Bride from 2014 to 2016 and recently rejoined the team as an Administrative Assistant in 2021. She has years of administrative experience in a variety of industries including working in legal and accounting firms. She enjoys being detailed, organized and efficient. When not hard at work, she enjoys exploring the great outdoors with her dogs, playing co-operative strategy board games and relaxing while sipping a nice Craft beer.

Carrie Freitag

CARRIE FREITAG

Administrative Assistant

Carrie is the newest member of our team and is our Administrative Assistant. She has previous industry and administrative experience and her fascination with the finance industry is rapidly growing. Carrie moved to BC in 1994 from Ontario and never looked back. While not working she loves hanging out with her two kids, awesome cat Leo, and enjoys a competitive game of 21, and her gardens.

Kelly Thompson

KELLY THOMAS

 Associate

Kelly is one of the newest members of our team and is an Associate working with Mark McGrath. She has over 10 years experience in the finance industry and is working towards becoming a Wealth Advisor herself. While not working, Kelly enjoys spending time with her husband and two young kids, reading the next fantasy novel from her never-ending list, and playing video and board games with friends.

Katie Norton

KATIE NORTON

Associate

Katie is a Business Administration graduate who joined the Sweeney Bride team in 2016. She takes care of on-boarding as well as managing account administration for our existing clients. She works hard to ensure the clients feel supported throughout the on-boarding process and is always available to answer questions.

A BC resident since 1997, Katie and her husband moved to Squamish to raise their two girls. They enjoy all of the outdoor activities and natural beauty that Squamish has to offer.

Hannah McVean

HANNAH MCVEAN

CFP® | Investment Advisor

Hannah is a financial planner and investment advisor with Sweeney Bride Strategic Wealth Advisory.

Hannah’s personable approach to client meetings unmasks financial goals and anxieties clients didn’t know they had or felt.  Her specialty is then taking the stress out of complicated financial planning issues. She has an infectious passion for personal finance (even about insurance, believe it or not!) and providing solutions that leave clients feeling more at peace about their finances.

Hannah holds the CERTIFIED FINANCIAL PLANNER® designation and has been working with Sweeney Bride since 2017.

When not at the office, you can mostly find her outside – mountain biking, white water kayaking or skiing. When resting, she will be at home engrossed in a great sci-fi or fantasy novel (or, from time to time, re-playing the Elder Scrolls video games).

Liz Woodsworth

LIZ WOODSWORTH

Office Manager

Liz joined the Sweeney Bride team in 2015 as office manager. She is the gatekeeper in the office and is the face that greets you as you come through the door. If she can’t help you, she will ensure you speak with someone who can. Liz is a long-time Squamish local; when not in the office she spends her days soaking up all that this town has to offer while chasing her two active boys. Liz brings her valuable organizational skills and enthusiastic attitude to the team.

Mark-McGrath

MARK MCGRATH

CFP®, CIM®, CLU® | Wealth Advisor

With over 10 years’ experience in the industry, Mark holds the Chartered Investment Manager (CIM®), CERTIFIED FINANCIAL PLANNER®, and Chartered Life Underwriter (CLU®) designations, and is also insurance licensed.

“Control your money or your money will control you”. The words of Mark’s late father instilled a passion for financial planning and personal finance in him at a young age. Mark has since nurtured this obsession into a commitment to educate and assist others in reaching and exceeding their financial dreams through purposeful, evidence-based, and comprehensive financial planning. Having spent the majority of his career focused on high-income professionals, Mark’s expertise lies in investment, tax, retirement, and estate planning for small business owners and their families.

Mark grew up in the Lower Mainland of British Columbia and has recently found home in Squamish with his wife, Denise, and young son Noah. When he is not immersed in reading and listening to personal finance content, he can be found snowboarding, playing strategy games with his wife, or teaching his son to play guitar.

Janet Bride

JANET BRIDE

CFP®, CIM® | Senior Wealth Advisor

Janet Bride is a Senior Wealth Advisor at Wellington-Altus Private Wealth and co-founder of the Sweeney Bride Strategic Wealth Advisory team.

With over 15 years’ experience in the Industry Janet holds the Chartered Investment Manager (CIM®), CERTIFIED FINANCIAL PLANNER®, and Elder Planning Counselor (EPC) designations and is also Insurance licensed.

Janet grew up in Ontario and moved out to beautiful British Columbia in 1995 with her husband, Paul, who is an adventure travel photographer. Her passion is to travel the world. Always interested in exploring different cultures and landscapes, she is grateful to have traveled to over 50 countries across 6 continents. She also enjoys continuous learning, spontaneous adventures with family and friends, and an active lifestyle in the Sea to Sky. Janet is proud to be a Big Brothers Big Sisters Alumni member since 2004.

She is highly motivated by helping people reach their financial dreams by creating comprehensive financial plans for individuals & families. While using a holistic approach to wealth management, she specializes in tax strategies and her goal is to encourage savings and help build our client’s wealth for a healthy and prosperous future.

David-Sweeney

DAVID SWEENEY

CFP®, CIM® | Senior Wealth Advisor

Dave Sweeney is a Senior Wealth Advisor at Wellington-Altus Private Wealth and co-founder of the Sweeney Bride Strategic Wealth Advisory team.

With over 26 years’ experience in the Industry Dave holds the Chartered Investment Manager (CIM®), CERTIFIED FINANCIAL PLANNER®, and Elder Planning Counselor (EPC) designations and is also Insurance licensed.

Dave has lived in Squamish for most of his life. Married to his wife Donna, since 1987, they proudly have 3 lovely daughters, Amy, Danielle and Jamie. With his time in Squamish, it has allowed him an opportunity to become involved in many valuable groups.

Dave is a retired Captain of Squamish Fire Rescue after 35 years of service. Another passion was sports and he has been a coach for Squamish Youth Soccer Association where he dedicated 10 years to coaching girls Rep teams. Additionally, he is a former member and Treasurer of the Sea to Sky Community Services Board. Dave is a frequent contributor to Mountain FM’s Mountain Monitor, providing general advice and financial commentary.

Dave continues his volunteer work as Treasurer for both the Squamish Hospital Foundation and the Squamish Downtown Business Improvement Association. He is also a sitting Board member of the Squamish Community Foundation.

Professionally, Dave started his Financial Planning practice in 1994. After living through both his parents’ demise and witnessing what a lack of understanding they had, he realized what sound planning techniques could do to ensure that an untimely death did not destroy one’s lifetime work. For over 20 years, he has made it his passion to assist others in not facing the same plight.