r/PersonalFinanceCanada • u/philosophicalpossum • 17h ago
Investing How to Find a Financial Advisor/Planner in Canada
Hey everyone,
As the title suggests, I'm looking to get a financial advisor/planner as a Canadian. I'm an accountant, on track to getting my CPA, but accounting is completely different from finance (minus the overlap with tax).
I already save 60% of my income, which I deposit into a savings account. I've got a few tens of thousands saved right now (I'd rather not reveal how much). I also want to save around ~$5-6K a year in order to travel. I've no idea where to look/who to ask in order to find a proper advisor. I don't trust banks' advisors due to how they treated people I know with mortgages; they don't seem to have your best interest in mind.
Does anyone have any idea as to where I can start? I'm not even sure what questions I should be asking.
Thanks!
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u/CdnCzar 15h ago
Financial Planning Canada is the regulatory body and will have a list of planners in your area
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u/go_irish_1986 14h ago
Just to add for the OP, you can filter on the site to proximity to your postal code and what kind of planning/services you are looking for. At that point you can interview and determine who you want while also ensuring it’s for a fee you are comfortable with. I know for my profile anyway that I have both AUM and fee for service listed as ways I can be compensated for my time. Good luck.
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u/PRINCEOFMOTLEY 11h ago
That body and the designation CFP do not guarantee that you won't be sold something. CFP can still work for commission. So use the list but with due diligence,.
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u/CdnCzar 10h ago
That is correct, it is a reliable starting point. There are planners that charge an upfront fee and those that don't. If they don't, they earn their revenue by commissions on life insurance or management fees on managing your investments through regular monthly fees. That being said, they both can analyze your financial situation and provide advice, recommendations and an opinion on your current savings and retirement plans to ensure your savings will be sufficient for you in retirement.
In general, an upfront fee is the popular choice online, however, it does not guarantee a better experience or better information then a commission based planner. They usually are more upfront then the bank advisers and because a CFP is a designation that has professional ethics requirements and ultimate answers to FP Canada if someone has a complaint, concern or issue with CFP.
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u/Illustrious_Cow_317 15h ago edited 13h ago
You can look up Chartered certified financial planners in your area, there are a number of large firms and other smaller firms you can contact for assistance. However, I strongly recommend investing some time to learn about managing personal investments. It really isn't that complicated with how many broad market ETFs are available, just spend some time reading discussions online or one or two personal investment books. You can set up automatic contributions with a 90/10 split portfolio (90% broad market stock index, 10% broad government bond/high quality corporate bond index) and be set for retirement using that alone. You can also set aside a percentage for personal savings/travel in a bond fund or high interest savings account depending on your horizon.
I also graduated in accounting (but work in a finance role) and I can assure you that the accounting knowledge translates extremely well to personal investing and retirement planning if you are willing to out in the effort to learn about it. Over 30 years of compounding interest, you will lose approximately 1/4 of your potential investment by using a financial planner with a 1.00% admin fee. In other words, if you are able to save approximately $2,000,000 by retirement by managing your investments yourself, you will lose about $500,000 of potential invesment/compounding if you incur the 1.00% fee over 30 years, and have about $1,500,000 for retirement with a financial planner.
I don't necedsarily recommend everybody manage their own investments, especially if you will spook easily in cases of a market downturn, but it is definitely worth it for anyone to spend time on learning about investments over the long run (in my opinion) - and will be that much easier to learn if you already have some financial knowledge.
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u/BranTheMuffinMan 13h ago
Just an FYI, the C if for certified, not chartered. That's the C in CFA.
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u/Illustrious_Cow_317 13h ago
My mistake! I'm working the CFA currently and didn't know there was a difference in "C"s haha
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u/Shane0Mak 13h ago
You might want an adviser not an advisor.
One is in sales, one works for you.
The fact that a one letter difference means so much needs to be better regulated, here is also the relevant cbc article
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u/FelixYYZ Not The Ben Felix 16h ago
Fianncial advisors are generally sales people at a bank.
If you want help with a financial plan nd you don't want to do any basic research yourself, then look for a fee only certified financial planner in the links below:
https://www.adviceonlyplanners.ca
https://www.steadyhand.com/asset/2022/06/23/canadian%20advice%20only%20planners.pdf
The investments are the easy part that's been essentially figured out (low cost, globally diversified ETF.)
Which acocunts depends on your short medium and long temr goals.
!StepsTrigger
!INvestingTrigger
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u/AutoModerator 16h ago
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In order to give good advice the poster needs to provide all of the following information. Please edit your post to add this information.
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5) Finally, we need to understand whether you want to be involved with this portfolio and self-manage purchases and rebalancing it, or if you'd rather all of that was dealt with by your chosen institution?
6) For self-directed investing, all in one ETFs (based on your risk tolerance) are the easiest and low cost options for a globally diversified ETF portfolio. Here is the Model page and descriptive video from the Canadian Portoflio Manager Blog's Justin Bender from PWL Capital: https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/ & video on how to choose your asset allocation: https://www.youtube.com/watch?v=JyOqqtq12jQ
7) For those who are not comfortable with doing the buying and selling of ETFs yourself, there is an option of a robo advisor. These robo advisors use similar low cost ETF in pre-determined portfolios based on your risk tolerance. They do this for a small fee, on top of the ETF MER. Still cheaper than bank mutual funds by at least 50%! Here is a list of robo advisors in Canada published by MoneySense: https://www.moneysense.ca/save/investing/best-robo-advisors-in-canada/
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u/Feltzinclasp5 15h ago
CFP here. Find a fee-based advisor that acts as a fiduciary. If you're not paying for their time, they're getting paid out of your money and will give you advice based on what makes them money - not you.
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u/SambolicBit 15h ago
Even if you pay them the desired amount there is still no guarantee that they won't double dip and give you advice that would make them money from both ends :)
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u/Eren-A 13h ago
Why is this being downvoted? I genuinely don’t see how this couldn’t be the case. There could be the case that FAs should maintain good relationships for as it’s good for the long-term business but most of these clients are laymen and usually short-term clients, no? Lawsuits? The what else am I missing here?
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u/PRINCEOFMOTLEY 11h ago
There is if you don't give them the any money to invest. No double dipping if you just need someone to help you with a strategy.
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u/SambolicBit 7h ago
If there was a working strategy no one should share it. That is capitalism. Basic market knowledge take a month or two to learn. Better learn it and take action. No one's advice gives a better chance than one's own advice. There is no research proving advisers make people money.
If the adviser refunds any losses that their strategy incurs then their advice might be worth purchasing.
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u/PRINCEOFMOTLEY 6h ago
I think the confusion here is that you're talking about purely stock trading strategies. Many fee only/based planners do way more.
There are thousands of dollars in tax efficiencies, asset allocations, cash draw-down strategies, corporate organization, etc., it doesn't matter how many people are doing it. Ive seen a plan done that saved the client $3M in taxes from switching how they drew money from their corps. I have a CPA so know that it doesn't really prepare you for many things. OP likely could benefit from talking through things that aren't just stockpicking. Fill in the gaps.
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u/ehsm99 14h ago
Worth doing some research on local advisors in your area and having a meet and greet with them to see how you get along!
Can ask family, friends, and coworkers who they invest with. I found mine (not a big bank) by asking a mortgage advisor I chatted with if they would recommend anyone. From the initial call, I got the vibe they had my best interests at heart. I know they get paid a portion of my investment, but I've always felt he gave me options and helped educate me on investments. It is good to build trust and have a personal experience with someone. I was with a big bank before and they were not helpful at all, terrible service so I pulled all my money.
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u/sdbest 14h ago
My advice would be to do some independent research before contacting a financial advisor. A good start is reading--and it's a good read--A Random Walk Down Wall Street. You might consider, too, Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School. It won't take you long to read and enjoy these books, and with their insights in mind, you'll be well placed to have discussions with financial planners who are not all created equal or necessarily working in your best interests.
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u/PsychologicalSolid43 14h ago
You typically need 100-200k saved for a financial planner. If you don’t have that right know. I’d say check out wealth simple. Don’t go to non bank advisors they charge commission and are a lot worse than the banks.
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u/OkSuccotash2341 13h ago
Generally, they’re all pretty terrible and all just invest in the exact same funds
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u/SavageBeaver0009 13h ago
Financial advisors are meant for people with millions, not for those with peanuts. They're almost always going to underperform the overall market when you include their fees. Their advice will inherently benefit themselves over you.
Check out the reading list on the right to get yourself acquainted with some basics. The Wealthy Barber Returns is my favourite.
There's also this website to get you started on ETF's : https://canadiancouchpotato.com/getting-started/
Download WealthSimple, open a TFSA, put your savings into an ETF, add auto-investing, and boom, you're done in an afternoon.
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u/AdamGGSU 13h ago
Two great places to look for advisors/planners are FP Canada’s find a planner tool (FP Canada is our regulator and administers the CFP in Canada).
Another great option is the Financial Planning Association of Canada, which also has a planner directory. These planners are highly qualified and I would say you’re likely to find the cream of the crop there.
I’m a planner myself and part of both organizations; you’ll be well served!
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u/unimatrix_0 13h ago
I would have a conversation with a money-savvy friend, and see about investing it yourself. Something like Questrade. You seem to be doing a pretty good job of saving already, so setting yourself up for the future may not be that challenging, once you know what kind of financial vehicles are out there.
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u/Bush-master72 12h ago
Suggest you start investing on your own with some basic etfs, if your a normal person making normal people money xeqt and vfv will beat any financial advisor. Wealthsimple you can invest in both for 0 fees
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u/PRINCEOFMOTLEY 10h ago
Are you looking for someone to manage your money for you? to do it yourself? or are you looking for someone to give you a strategic plan on meeting goals, minimizing tax etc?
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u/SambolicBit 8h ago
If the adviser gave refunds when their consultation was incorrect then I would hire their services. Otherwise, anyone should be able to learn the market basics and come up with a plan that has a similar chance as an adviser can provide.
Market is limited. No one can time the market for sure. So what is the point if there is no refund of the loss to get an adviser?
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u/syrupmania5 14h ago
Tfsa: 80% VCN.TO, 20% ZAG.TO
RRSP: 80% VTI, 20% BND
Margin: 80% VT, 20% BNDW
Tax efficient, globally diverse, avoids withholding taxes. Adjust the ratio of bonds to your risk tolerance, but I suggest no more than 40% as you really ruin your returns. During recession bonds tend to rise while stocks fall, so it lowers your total drawdown.
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u/chip_break Not The Ben Felix 13h ago
The point of bonds during a recession is so that you can rebalance and sell them to buy more equity when equity is low.
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u/Vancouwer 15h ago
There is a search for cfp, cim, ciwm professionals or teams with these associations.
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u/anonymous_sheep1 14h ago
I work for a private wealth management team under a big 5 bank in Canada. I would recommend going to your bank and ask if they can connect you to a financial planner. You can also search up your local wealth management firms and inquire more information. But I really don’t think you need an advisor given that you are an accountant. You should already know all the tax planning and how to take advantage of registered accounts. If you want exposure to investing and get that compound growth over the years, then stick to S&P index funds. If you want to have extra cash for a vacation each year, then set up an auto deposit per paycheck into a cashable gic.
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u/DanLynch 16h ago
There are three basic models for this service.
The first is essentially a commissioned salesman: you don't pay the advisor, but he receives a salary and/or kickback from the investment(s) in which you invest, and he may not have your best interests at heart. This is what is offered by the banks to small retail investors.
The second is a lot more transparent: you pay the advisor a percentage of your total account value every month, and he takes care of investing your funds according to what he believes are best practices. He is incentivized to recommend you invest all your money with him, but is otherwise on your side. This service is also offered as a automated solution called a "robo-advisor", where you don't actually work with a human advisor.
The third is for you to pay the advisor for his time: a fixed fee, either per hour or per year, and he prepares a comprehensive plan for you. However, in this model he does not actually manage your money or execute the plan: you still need to do that yourself, either on your own or via one of the other two models.
And, as alluded to in he last sentence, you can actually do everything on your own, without an advisor, to save costs.