Your Guide to Hiring a Financial Planner

Hiring a financial planner shouldn’t feel like a leap of faith, but for many people, it does.

Maybe you’ve never worked with one because trust feels impossible. Or maybe you’re stuck with an advisor who doesn’t seem to have your back – someone who pushes products instead of creating plans, or leaves your questions unanswered.

You’re not alone. This is exactly what I hear from people all the time.

Here’s the truth: choosing the right financial advisor is like handing someone a gift box containing your entire life savings and future dreams. That’s a big deal, and you deserve to feel confident about who you’re trusting with that box.

In this episode, I’m sharing the non-negotiables to look for, the questions that separate the pros from the product pushers, and the red flags that should make you run.

Show Notes: Your Guide to Hiring a Financial Planner

Hey there. Welcome back to the Heart of Your Money. Okay, so today I’m going to talk about how to find a financial advisor you can trust. So it’s going to be your guide to hiring a certified financial planner. And then I’m going to give you some questions to ask, and I’m also going to give you some red flags to watch out for.

Here is what I see or hear all the time. People come in and it’s one of two things. They’ve either never worked with a financial planner before, and not because they don’t want help, but because they just don’t trust the process and they’ve heard stories or they’re just, you know, their hackles are up and it just becomes a pain in the butt and they’ve just never worked with anybody before because of those trust issues.

And then there’s others that already have an advisor, and this one is the most common. They come in, but they don’t feel like they’re getting their advisor’s best work. Maybe their questions aren’t answered. Maybe it feels like the advisor doesn’t have the knowledge or capability to handle their situation. They’ve never had a financial plan. It’s always a product conversation, and quite often people stay with an advisor they’re unhappy with simply because they don’t know how to find someone better. If any of that sounds familiar, this episode is for you.

We’re going to talk about what to look for, the questions you should ask, those red flags I mentioned so that you can feel confident and kind of fill your toolbox and you’re going to have a little bit more knowledge about what to ask and to find someone that truly has your back. Choosing your financial advisor is a big deal.

This is someone you’re trusting with your life savings, your retirement, your dreams. I’ve said this before, I often think it’s like I imagine this little gift box with a bow, a ribbon on it, and someone is handing this over to me and it’s their entire life savings and it’s their entire future as well. And so we take that so seriously.

Sometimes, that’s probably what stops people from going to either find an advisor because they’ve never worked with anybody, but also leaving an advisor. It’s because of that box. It’s so important. Even if the first person feels like a great fit, my suggestion is this is going to be you interviewing and talking to three, four, maybe it’s five people before you start to feel like there’s a good fit. It’s not about playing hard to get, it’s about making sure you have something to compare. That way when your gut says yes, you’ll know it’s yes, not just the only option you’ve seen.

Interviewing a few financial planners is important. It’s normal to not connect with everybody. You’ll want to spend some time seeing if you feel safe, if you feel listened to, and if there’s a good fit. This relationship is meant to be long-term, so it’s worth putting in the effort upfront to get it right.

So, okay. Little bonus plug. And yes, I am biased in this, but there are studies out there and working with a good advisor has been shown to add two and a half to three and a half percent in value every year. Not just in investment returns, but in real planning. Thinking about it, behavior coaching – we earn our 1% advisor fee during bear markets and downturns, and it’s because the investment always does better than the investor, the decisions we make that are emotional. So that’s the behavioral coaching.

Then there’s the tax strategies. That is my jam. I love mapping out a plan, and it’s all about how to keep the most amount in your pocket and pay the least amount of taxes. And then the withdrawal planning, the rebalancing, the risk, you name it. But there is a bonus there that you can increase your returns by that two and a half to three and a half percent by working with an expert.
What to Look For
Okay. I’m going to give you the basics. Let’s break it down. Here are the non-negotiables you should be looking for.

A certified financial planner – that is that CFP accreditation. And I just had a call with someone who I totally adored our conversation and I just wanted to scoop them up and bring them into our community and say, I got your back. I had only really talked to them for like 15, 20 minutes, but it was the same conversation. And the number one thing, you know, was, well, I don’t see a CFP behind my advisor’s name, but there was a whole bunch of other issues there and the first thing that came to mind was I said, well, they could very well still be a certified financial planner. You’re going to have to have that conversation with your advisor.

And all I could think of was I could not not put CFP behind my name because the education courses are hard. They’re meant to be hard. There’s things in there that, and I had to write my exam over again. And Jason, if you’re out there listening, like, thank goodness for your coaching people across Canada. Once you get your CFP, we kind of proudly want to put it behind our name because there’s a lot of work that goes into it. So I can’t imagine that a person wouldn’t put it behind their name if they had their certified financial planner.

So look for that. It is the top designation in Canada means they’ve completed education, passed exams, and follow strict ethical rules. You can also go to the website and look them up at FP Canada and see are they registered at FP Canada and that’s where you look to see if they’ve had any complaints filed, if are they in good standing. So that’s a non-negotiable.

Another one is specialization. Are they experienced in what you need? Retirement, divorce? Are you a business owner? If you’re a soon-to-retire couple with rental properties, don’t go with someone who only works with 25-year-old crypto investors. That just makes sense. So you want to find someone that actually has experience and works in your situation.

The other one is transparent compensation. They should explain clearly in plain English how they get paid. No jargon, no dodging. It should be easily answered. I’m hoping it is a transparent 1%, meaning 1/12th that you see on your account come off every month, and it comes from zero products. There’s no trailing commissions.

You need to have a clear answer and it needs to be easily understood, which leads into the next non-negotiable.

Written agreement. So you deserve to see what services they provide, how often you’ll meet, what you’re paying for, and then that compensation piece needs to be in writing. You need to see it and understand it.

And the other one is privacy practices. You know, if they’re emailing personal info without secure tools or asking for sensitive documents without, you know, giving you a secure link or protection or, you know, asking for your SIN in email. That’s, you know, privacy matters. And so that’s important to look at the privacy practices of that advisor as well.
What to Ask When You Meet with an Advisor
Now let’s talk about what to ask when you meet with an advisor. These questions help you cut through the fluff and figure out if they’re the real deal.

Number one, what are your qualifications? What experience do you have and who have you worked with? What are some examples that you know of cases, and what’s your specialty?

What services do you offer? Planning, investments? Do you do tax prep or planning? Is there any insurance? What everything is on your table that you do?

And then what’s your approach to planning? Will you build a plan and walk away, or is there support along the way? What would this look like? And then you want to ask them if they’re the only person, or is there a team and who they should expect to be working with?

And then how do you charge for your services? And again, that should be that transparent compensation, super easy, and you know, is it hourly, flat fee, percentage of assets? Are there any compensation from products?

Another question is, do you have professional duty to put my interests ahead of yours? Well, of course, I hope they’re a part of some association. FP Canada. There’s FPA association. So what kind of groups and affiliations do you have and are you regulated by who? So explain to me who is your dealer, what they look like? Is there a conflict of interest with your dealer who provides products? Meaning, you know, does your dealer provide products and push you to only use these products? Or is there an affiliation? Like what’s the conflict of interest here and how are you regulated?

And then the last one is, can I get this all in writing? And can I see what something would look like? So if there’s a financial plan or if you know, statements, what would this look like? And of course, the privacy of not showing anybody else’s.

Bonus question. And this is one that I usually catch people off guard and I ask them, would you like to speak to one of our clients? Would you like to speak to a reference? But this is important. They should say, so if you ask them and say, you know, can I talk to some of your clients and do you have any references and referrals that I can talk to?

The number one, first thing they should say is, yes, but let me get permission first. You want someone who respects client confidentiality. So whenever I offer that, they look surprised and they say, I can do that? And I say, you bet. But just let me talk to a couple of people, make sure they’re okay with me giving their name or phone number or email, and I just want to make sure they’re comfortable with that. And I have their permission first, and then I can send that to you. I want to make sure that everybody is feeling safe with their privacy. I would never want to overshare.

So that’s a nice thing that you can ask for as a reference as well. And then you can ask them a whole bunch of questions like, how is that onboarding? And do you feel like it’s transparent and tell me about the services you get. And it’s a nice piece there for people to just get a little bit more comfortable.
How Advisors Get Paid
So I want to talk briefly about how advisors get paid because it can get a little bit confusing. Now, one of my first episodes that I’m going to suggest you go back, boy, we’re at 141. I think this one that you’re listening to is 141. I can’t believe that. So I feel like if you go back to like episode one or two or three, I can’t remember, somewhere in there I actually talk about, you know, pull behind the curtain so that you can see these are ways advisors get paid because to some people it still seems like it’s very confusing and they don’t quite understand.

There’s fee only, which is a fee for service, so you pay a fee for a financial plan. You can pay by the hour or a flat fee. Our hourly rate is $190 an hour, and generally that’s after the package when we’ve done a financial plan. And there’s some work that needs to be done after, you know, six months or annually after that, we charge that hourly rate.

There is fee for service plan. So before you even become an investment client in our office, you have to pay for a plan, and now there’s a discount if you do later become a client. But the idea is that there’s no, you know, there’s no crossing of boundaries about talking about investment choice or, you know, products. That’s not even part of the financial plan. That’s not even brought up in that first piece because we’re really just mapping out and doing all the taxes and what bucket do you pull out of first and when should you take CPP and OAS? All those common questions have to get answered, so that’s a fee for service we charge.

Then in investments, if you become an investment client, it is 1% of assets, and so that’s a percentage based, and this is most common. And it is the most transparent. You pay a clear fee from your account. There’s no sales incentive, no product bias. It doesn’t matter what product you invest in because there is nothing being paid by a product at all.

And so that’s super important that you see it transparent every month. One percent meaning you see 1/12th each month come from your account. And so if someone asked you, what do you pay your advisor specifically, you’re like, let me pull up my account last month. I can tell you exactly what I paid them.

Another way advisors are paid is commission based and so they call that a front end or a deferred sales charge. And I believe, ooh, I don’t know this for sure. I think deferred sales charge is not allowed to be sold anymore. I can’t guarantee that, but it should be. I know it’s on its way out the door. And that deferred sales charge, if you look at investment, you see the word DSC behind the name of the investment.

That means it’s on a seven year ladder. And so that means you’re locked in for seven years. And if you want to switch or change or have access to that fund and cash it in, depending where you are on the ladder for the number of years. So let’s say you’ve only had it for three or four years, well, there’s going to be a fee of the remaining years that you haven’t taken. So if you are three years from the seven years, then you’re going to have to pay a fee based on four years left.

I’m not explaining it very well, but imagine stepping up a ladder each year you own it. You have to get to the seventh step of that ladder. Then it can mature without you paying a fee if you make change or switch out or cash it in. If before the seven years, there is a fee and guess whose account it comes off of? Yours. Comes right off your investment and so that is a no-no. That is not in your best interest. It pays the advisor upfront. The moment they sell it, they get that 7% commission, and after that you’re kind of left to your own and sometimes that’s where you don’t see any more service. They’ve got their one time hit and then it’s just complicated and it’s not in your best interest and it gives you fees if you need to access it. So I do not suggest that.

And so the other version is front end and there’s no fees for you to switch or change out. But you don’t actually see that transparent fee. It’s behind the scenes. So the product actually pays the advisor – you won’t see any of that compensation. And so then you go to wonder, okay, why are they picking this investment choice? I don’t see their fee. Did they negotiate more? Is there something more? It’s just too cloudy.

Okay. So you want a 1% of assets or that percentage based of your assets to come off of your account, or you want that flat fee, fee for service where you know exactly what you’re paying upfront and what service you’re getting in that cost.

Bottom line, if they can’t explain their fees in one or two sentences clearly without jargon or you understanding, that’s a red flag – put on your runners and run. You should understand exactly what you’re paying and what you’re getting for it.
Red Flags to Watch Out For
Here’s what should make you pause. So I’m going to give you a couple of red flags now to watch out for.

They pressure you to move your money right away. First meeting, signing on. No, that’s a lot of conversation. How can you even know what to invest in if you don’t have a financial plan? So you better be having a financial plan to map out, you know, is this long term, is this short term, and what product should we invest in? You can’t do that without a map and a guide of where and what buckets you’re going to need and taxes and such.

Another flag, they overcomplicate how they get paid. It’s confusing. Jargon, hard to follow. You just can’t understand it. That’s a flag.

They skip a written agreement. So sometimes when we meet with people for the first or second time, they want to leave me with some statements and I don’t need their statements of, you know, it could be whether it’s a tax return, a copy of their pay stub or another investment statement, whatever it is. I don’t need a copy in those first meetings, but if they want to leave a copy and there’s some, you know, a calculation or some quick question and before they sign up to do a financial plan, we have a privacy disclosure sheet that we sign. Even though you are not a client, here is our agreement to keep your privacy safe and have confidentiality, and you’re giving us this information. And then when you do sign up for a plan and you sign on, then there’s another, you know, here’s our confidentiality agreement, all of that. So red flag is you don’t see any written agreement and you’re giving them information and you don’t have any privacy agreement.

Here’s a common red flag. They say they’ll follow up and they don’t. So if they say that, you know what, I’ll send you a note and I’ll send you a follow up email in a couple days, and then a week or 10 days go by and they don’t, that’s a flag. It’s a sign. Anyway, there’s a whole bunch of unpacking there that one could do, but there’s also the sign of capacity, the sign of processes and organization skills in there. And so keep an eye on that.

I will say, I did have someone call me and say, I’ve been waiting for the email and it never came. It was in their junk. And so I resent it and I said, I’m so sorry. We hit their spam email for whatever reason, I hit their spam box and they didn’t get it. And so I was so thankful they called back. And so now in our office, we’re having this conversation about like, hey, if I don’t get a reply back saying, hey, you got this email, let’s phone and follow up and say, hey, did you get the email? That happens once in a while. But I’m talking about that disorganization and being ghosted and falling off the radar.

The other red flag, they email you sensitive documents without any security, no passwords. And so maybe they’re sending you a copy of, you know, your tax return back and they’ve circled something. I don’t know what it is, but they’re sending you information that has your name and SIN, or date of birth or account numbers via email without a password.

And then this flag, I kind of think it’s as important as all the rest. Or is it more important? I don’t know. It depends. It’s that gut feeling because if you just don’t feel comfortable and you have that gut feeling, maybe they haven’t done anything in the other flags, right? Maybe it seems fine, but there’s a gut sinking feeling. That means that they might not be your person. We can’t be everybody’s person and they might not be your person. And so thinking about that long-term relationship is that you got to listen to your gut. Does this feel like a good fit? Do I feel safe and listened to and such? And then if it feels shady, trust that. You don’t need to be a financial expert to sense when something’s wrong.
Wrap Up
Take away. I just want to share, A good advisor should feel like a guide. Someone who listens, explains clearly, who makes you feel like a human, not a transaction, and they’re educating you along the way. It’s a partnership, so take your time, ask the right questions, get a second opinion. You’re not being difficult, you’re being smart.

Thanks for tuning in. If you need anything, we’ve got a download. I can send you our 10 questions to ask. You name it, give me a shout- [email protected]. If this helped, share it with someone who’s just starting their financial planning journey as well. They might appreciate it. Thanks. Until next time, take care.