Choosing a financial planner

When it comes to investing, the right advice pays off
By Joanne Thomas Yaccato

We all know that a stock or a bond doesn't care whether its owner is a man or a woman. But industry observers find that some financial advisers do: financial advisers typically spend more time with male than with female clients. Women's long-term goals (especially concerning retirement) are often ignored. And, because some planners don't take the time to listen carefully to their female clients, women can end up with investments that are either too risky or too conservative for their needs.

But these things are certainly changing. ScotiaMcLeod, Royal Bank and others are training employees to be attuned to the needs of female clients without being patronizing. Trimark, Midland Walwyn, Nesbitt Burns and others have introduced educational marketing campaigns that target women. Even high-end investment counselors like Connor, Clark are advertising directly to women investors. It's good news for women investors, and it simply makes good business sense: in 1994, Canadian women-like you, me and eventually baby Kate-invested $7.25 billion in RRSPs alone.

Do I need investment advice? Probably. The Canadian Association of Financial Planners suggests you ask yourself these questions: Are you confused about conflicting advice from different sources? Are you paying too much tax? (Show me someone who isn't!) Are you having trouble making ends meet or saving money? Has there been a major change in your financial life recently? If you answer yes to one or more of these questions, chances are you could use some expert help.

Women take the lead in asking for help. Compared with men, we're more likely to seek investment advice. And it pays off: industry observers find that women make fewer investment mistakes than men. They also find that, in general, people with a financial adviser fare better than those who handle their own affairs.

What do advisers and planners do? The first thing your money expert should do is give you a checkup:how financially healthy (or unhealthy) are you? The next task is to crystallize your long- and short-term goals, and develop a plan of action to help you get there. Then, every year, she should carry out a money medical to ensure that your plan is still healthy.

How do I find one? Ask friends and family for referrals. Check out the free seminars offered by many advisers and bankers. Try to interview no fewer than three candidates before making your decision. (See "Who's who?" below for a rundown of what the initials after your expert's name mean.)

Look for synergy, simpatico, chemistry. Is this person listening to you? Does she understand your tolerance for risk? Is he close enough in age to you (usually up to 10 years older) to remember what life is like for you? How long has she been in the business? If you are just starting out, you may have simple needs, so a rookie may be just right (and is likely to have more time to spend with you than a veteran with 500 clients). Look for a professional designation or, at the very least, someone who is working toward one. How stable and well-known is the company he works for? One final caution: consider avoiding friends and family in the business, unless you're certain they can be objective about your needs. It's much easier to fire an arm's-length business associate than it is to fire your sister.

Take control I've seen women from ages 17 to 70 take control of their financial lives with the help of the right adviser. I didn't turn to a professional until I was 30 and saddled with a heap of debts. It won't be so for Kate, if I have anything to do with it-I hope when she gets older, she'll come to me with as many questions about bonds as about boys.

Who's who?
  • Financial planner Under current Canadian law, anyone can hang out this shingle. Look for a designation (see below).
  • Financial adviser Usually a commission-based salesperson with no designation, who sells the financial products of one or more companies.
  • Certified Financial Planner (CFP) Accredited by the Financial Planners Standards Council of Canada. Usually paid on a combination of fee-for-service and commission basis, though many also sell financial products on a strictly commission basis.
  • Registered Financial Planner (RFP) Accredited by the Canadian Association of Financial Planners. Compensated with commissions, fees or a combination of the two.
  • Chartered Financial Consultants(CH.F.C.) A financial planner for the insurance industry. May be paid by commission or on a fee-for-service basis.


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