How to choose a financial advisor

Choosing a financial advisor

Each stage of life is an opportunity for a new chapter you get to write. Whatever your next chapter looks like, we’re here to back you up with actionable plans and personalized strategies unique to your financial story.

Maybe you're thinking about planning for a fulfilling retirement, preparing for education costs or opening a business.

You don't have to go it alone. Partnering with one of our financial advisors can give you the support you need to achieve your financial goals.

You can learn more about the benefits of working with a financial advisor. Here, we’ll take a look at the different types of financial advisors first, then go into the best way to find one who’s the right fit for you.

Understanding the role of the financial advisor

Before you begin the process of selecting a financial advisor, it's important to know what they’re offering and if that matches your style.

Types of financial advisors

You can categorize financial advisors in a few different ways. First, you might group them by how they offer their services. Let's take a closer look.

• "Robo-advisors" – Some financial services are provided entirely online, sometimes referred to as robo-investing. In this case, you don't meet with an in-person advisor. Instead, you get all your advice online. After you input your information, computer algorithms give you feedback and answer your questions. This type of service is less personalized, and therefore less expensive. However, there may be account minimums or additional fees for various activities.
   
• Online financial planners – This option provides similar services as robo-advisors, but you’ll also have access to a professional advisor. Keep in mind that the advisor may not always be the same person, so it can be difficult to build a relationship and have someone who truly understands you and your goals.
   
• Traditional financial advisors – The advantage of a consistent financial advisor is the opportunity for a long-lasting relationship and a partner to help you stay on track toward long-term goals. Your dedicated financial advisor should take the time to get to know you, including who and what matters most to you. With this deep, consistent knowledge and understanding, you can make the right decisions together as a team.

You can also categorize financial advisors by how they charge for their services. They might be commission-based, fee-based, fee-only or a combination of approaches. Always feel free to ask questions of a potential financial advisor about how they’re compensated for their services. They should be willing to answer your questions and make you feel comfortable and confident working with them.

Services you may need

Another consideration when looking for a financial advisor is what services you may need. Some of the information you might want to ask for includes:

• A complete list of the investment products they offer
• A complete list of the services they offer. These might include individual investing, trust services and insurance options, among others
• Information about how they work with clients. Do they only interact online or do they meet with you in person? Are they full-service or do they offer limited services?
• Clear, easy-to-find information on how to meet with or contact them. For instance, their hours, locations, customer service contacts, websites and social media platforms
• Tools and technology, like online access and savings calculators
• And financial education resources, including up-to-date market guidance and investment research

Choosing a financial advisor that's right for you

Many investors research their options online or talk with family and friends when they're looking for a financial advisor. Both of these options can provide great information to help narrow your search.

If you find candidates you're interested in pursuing, consider vetting them and their firms.

What to ask for during your vetting process

A good place to start is the Canadian Investment Regulatory Organization (CIRO) who regulates all Canadian investment dealers and their approved employees and agents. The CIRO Advisor Report available on the CIRO website will help you find an Advisor's background, qualifications and disciplinary information for registered Advisors. The CIRO Advisor Repor displays industry courses that an advisor has passed in connection with a CIRO approval. This report only provides information about individuals who are currently approved with a CIRO-regulated firm. If you're looking for disciplinary information about an individual who's no longer working for a CIRO-regulated firm click here.

Know your advisor

Advisors must meet educational standards to receive CIRO approval to work in specific positions at their firms. The AdvisorReport provides information about an individual's educational background including industry courses that have been completed to attain certain proficiency standards.

Advisors may have other certifications or designations that may not be in this database. If you are interested in learning more about an advisor’s certifications, visit Understanding Financial Certifications to use CIRO’s online Glossary of Financial Certifications.

Get to know your candidates

If you have a few financial advisors to narrow down further, you may want to set up interviews to talk with them individually and get to know their teams and organizations. These 10 important questions to ask a financial advisor can help you start the conversation.

The right candidate should take the time to understand your and your family's situation and goals. And, remember, it's not unreasonable to ask them to draw up a preliminary plan for how they would help you before committing to them.

Think about the long term

For a financial advisor to be effective, they need to know personal things about your financial life. So, on top of making sure they are knowledgeable, trustworthy and experienced, it's important to feel like you can connect with them. You'll want to find someone you can communicate with, easily and candidly.

Do they seem like a partner who will keep you at the center of every decision? Will they value their relationship with you? Do you feel like they really listen to you? Developing a close and comfortable working relationship together can help the two of you to realize the possibilities of your future, together.

While it might take some research and legwork to find the right financial advisor, it’s well worth it. Having a financial professional by your side who understands your needs and goals for the future can make your journey much easier, more enjoyable and more impactful.