What Onboarding With Your New Financial Planner Should Look Like in Canada
You’ve said yes to working with a financial planner in Canada and now you’re sitting in your first onboarding meeting with a stack of forms in front of you. One of them is the KYC (the Know Your Client form) and most people sign it without fully understanding what it does or why it matters.
Certified financial planners Zena Amundsen and Nicole Putz of Astra Financial walk you through what should actually be happening in that first meeting. They cover what the KYC form is, what compliance means, how your personal information is being used and what questions you’re entitled to ask before signing anything.
Show Notes: What to Expect From a Financial Advisor in Canada
Nicole: Hi, I’m Nicole.
Zena: I’m Zena.
Nicole: Today in this episode, we’re talking about those first meetings where you’re actually signing some forms. We’ll cover the Know Your Client form, also known as the KYC, break down what compliance means in this meeting and explain why we need all that personal information upfront — and why it’s a protection piece for you.
What Is Onboarding?
Nicole: So you’ve said yes to working with a financial planner. You’re ready to move forward, and now you’re in the stage where things are actually getting signed and set up.
With this comes a whole lot of paperwork, a whole lot of personal questions and probably some terms and acronyms you’ve never seen before, like KYC or compliance. What people don’t realize is how important these meetings actually are, both from a protection standpoint and a “know what you’re signing” standpoint.
This is exactly why we wanted to do this episode. This part of the process is actually a huge protection piece for you as the client. Today, we’re going to give you a backstage pass into how we would actually explain this to our clients at this stage of the process. We’re going to give you a sneak peek into some of those conversations, what they can look like, and what should actually be getting walked through with you by any financial planner you work with.
Hi, I’m Nicole.
Zena: I’m Zena, and we’re certified financial planners here at Astra Financial. Our specialty is getting you retirement ready and making sure your money lasts your lifetime.
Nicole: Let’s set the stage here. You’ve gone through a couple of meetings already. You’re familiar with the process and probably feeling pretty good about the planner you’re working with. You’ve given the big check mark — yes, let’s go, let’s do this.
These are what we call onboarding meetings in the business. Onboarding means account setup, signing forms and actually getting everything ready to go so you’re officially a client. The first type of form you’re probably going to see is this elusive KYC. So what does KYC even stand for?
Breaking Down the KYC Form – What to Expect From a Financial Advisor in Canada
Zena: Why do we have so many acronyms? It stands for Know Your Client form. A lot of advisors will just skim through it and get you to sign, and you’ll blindly trust the process. But in the back of your head you’re thinking, “What am I signing?” Today we’re going to talk about the Know Your Client form and why it matters.
Nicole: Right. And there are going to be a bunch of things on that form. There’s this excitement around account opening, but what we want people to understand is that you do have to slow down and actually understand what you’re signing. So we know it’s a Know Your Client form, but what does that actually mean, both on the advisor side and the client side?
I love the way you explain this in meetings. You always talk about needing to “pinch” the client to know they’re real. Can you explain that? When you say that to clients, I think it’s such a clear way to help people understand why we’re actually getting them to sign these forms.
Zena: One of the things the form is doing is gathering all your information — making sure we’ve got your date of birth, your address is correct. That’s the due diligence piece. But there’s another reason on our end. As an advisor, we need to be able to prove that you’re a real person. That’s the compliance piece, and we’ll talk about compliance more in a bit.
That’s why we’re sitting across from you asking for your driver’s license number. We need to verify you’re real. Why are we asking for a pre-authorized debit form or void check? Because you have to be a Canadian with a Canadian bank account to open an investment account, whether it’s an RSP, a TFSA or anything else. These are the checklists, but there’s more to it. We dig a little deeper, and this is where people think we’re getting nosy.
Why We Need Your Financial Information
Nicole: Right.
Zena: We’re asking things like: How many dependents do you have? What is your income? What is your net worth? And we walk you through that so you don’t have to just spit out a number. There’s a reason for all these questions, and it can feel really personal.
Nicole: And I think it’s worth saying that we’re not just going through it because the form requires it. There’s a protection piece, but there’s also this underlying purpose — we’re asking these questions for a reason. So why is net worth even part of it? Why do we care?
Zena: Here’s an example I always use. Say we’re going through your net worth and looking at your assets and annual income. If you told us you make $25,000 a year — which puts you in a low tax bracket — and you have a million dollars in debt from various places, and now we’re picking an investment. And we’ve picked something that’s a little risky.
Where are the flags here? You have significant debt and a limited income. That gives us a cashflow conversation to have. And now we’re about to recommend something really risky. Red flag, red flag, red flag. This is the protection piece. When we ask about how much you make, whether money coming in covers what’s going out and what your debts and mortgage look like, we’re putting all the pieces together. We’re building a complete picture of who you are so we can match you to things that actually make sense for your financial situation.
Nicole: Totally. And I think it’s worth not glossing over that — the matching piece. The KYC is doing that work, and this is a good segue into compliance. As advisors and financial planners, this isn’t optional. This KYC form has to get signed.
Zena: Compliance.
What Compliance Means and How It Protects You
Nicole: So compliance. Talk to me about what that actually means from our standpoint. What does it mean to be compliant?
Zena: There are rules and regulations we have to follow, and there’s someone who oversees everything. So when you fill out all the paperwork to become a client, and the Know Your Client form is part of that, you might be thinking, “You’re asking for my SIN, you’re asking for my driver’s license number, and now you want to know everything about how much I make and what debt I have.” We actually have a compliance officer — someone above us who makes sure all the rules and regulations are being met. That’s where they’re looking for red flags.
And everything stays completely private. It’s safe. It’s not going out to any institution. It’s not going toward your credit check. It’s really just between you, me and a compliance officer who goes through and checks that everything is filled out properly and that we’re doing all the right things. Compliance is a protection piece for the client that holds us accountable and makes sure we’re following all the rules and regulations.
Nicole: Absolutely.
Zena: On a side note — as advisors, we have our own version of a Know Your Client form that goes to the regulators. They run a credit check on us continuously to make sure there aren’t flags on our KYC saying, for example, “This person is $5 million in debt and has borrowed a significant amount of money.” Because if there are, clients need to ask: is this advisor actually acting in my best interest? So compliance protects the client and holds us accountable too.
KYC Is Not a One-and-Done
Nicole: Right. And it’s worth saying that the KYC form isn’t a one-and-done. Life happens and things change. We do this at the onboarding stage — yes, you’ve potentially already gone through a financial plan, we know a bit about what’s going on in your life, and now we’re getting everything on paper, both from a compliance standpoint and a “get to know you” standpoint. But because things change, KYCs need to be updated compliantly every three years or when major life milestones happen.
Zena: You say every three years, and I’m laughing because it feels like every time we sit in front of a client we’re updating the Know Your Client form. After a few years of working with us, clients are used to it. But these things still need checking, because something might happen that you’ve completely forgotten about. All of a sudden there’s a change in income, and then it’s, “Tell me more about that.” Maybe we need to update and change the plan. It’s also just a really good check-in.
Some of the other questions on that form that people forget about — they’ll say, “Why are you asking me this?” One of them is: “Have you borrowed money for this specific investment?” Everyone says, “No, you know I haven’t.” And I say, “I know, but I have to ask.”
Nicole: But you have to ask. So do we usually recommend borrowing money to invest?
Zena: No. We don’t want to go down that road and complicate things.
Nicole: Exactly.
Zena: Another question is: are you related to your advisor? And does anyone else have an interest in this account besides you? You can see we’re digging a little to uncover more about the circumstances. We want to make sure nothing is unclear. Sometimes we need to peel back the layers a bit more.
Questions That Get Glossed Over
Nicole: Absolutely. So all the questions that come up in this meeting serve a purpose. There’s the compliance piece, and there’s also us making sure that before we move forward with any actual account opening and investments, we’re doing our due diligence. So maybe where I want to land before we move on is this: what gets brushed over in these meetings that we always make a point of going through carefully? Is there a tip, or even just a heads-up for clients about what they should be paying attention to when they’re sitting in these meetings?
Zena: Stop, read and ask. Ask as many questions as you can. When an advisor is moving through this quickly saying, “Yeah, no problem, this is just the account opening docs, sign here” — slow down. Ask questions. One of the sections a lot of advisors will gloss over is called investment knowledge.
The Investment Knowledge Section and the Four Boxes
Nicole: Right.
Zena: And there are only four boxes: poor, fair, good and sophisticated. That seems really simple, but it’s the opening conversation to getting to know you a little better. I’ve seen where a default checkbox happens on the program — it literally just defaults to whatever you selected the last time you filled it out, maybe two years ago.
Our goal is to get you better and better. So if you started off with very poor knowledge of investments, our job is to move you up to the next box. Your advisor should tell you that. We’re going to make you a better investor — someone who understands what you own, why you own it and how you’re investing. I’ve seen that section glazed over a lot with no conversation around it. Talking through it creates an awareness of where you’re both at and, hopefully, how you can grow from there.
Nicole: Right. And there is that education piece too.
Zena: Yes.
Nicole: So it’s a couple of things. It’s going through the paperwork properly, making sure you understand what you’re signing and that your advisor is explaining it in plain language. But if we’re doing our job right, we’re also educating you. Every time we go through these KYC forms, you should walk away with a little more knowledge than you had before.
Investment Allocation, Timeline and the Bucket Approach
Zena: There’s one more piece on the Know Your Client form that covers your investment allocation. Is it going to be growth-focused? Is it just for income? And what is your timeline? That’s another section I’ve seen no one even talk about.
Nicole: So what does timeline actually mean?
Zena: When do you see yourself needing to draw a large chunk out of your savings? That could be your registered savings, your TFSA and we actually break it down bucket by bucket. When we create your buckets, we’re spreading that out and saying, “Okay, your RSP — when do you think you’re going to need to start drawing from it heavily?” And if we’ve already done a financial plan, that conversation flows really naturally. Is this bucket short term, one to three years? Long term, over ten years? This is about the timeline for when you see yourself needing that money.
That’s a conversation worth sitting down and having with your advisor, because in a lot of cases, advisors who aren’t doing financial plans first don’t have this information. How would they know?
Nicole: Totally. And what you’re saying is that risk tolerance isn’t just a gut check. It’s actually about how much time you want that money to stay in a specific bucket.
What’s Next?
Nicole: So there are a few things we’re thinking about at once. So if we’re going to wrap it up here — onboarding isn’t just signing papers. It’s about understanding what’s happening and why these things are being signed, both to protect you and to keep you informed.
Zena: And to get used to the conversations. We’re not being nosy.
Nicole: Right. We’re not asking these questions for fun. It’s in your best interest for us to understand all of those layers. It’s better for us to dig deep and not stay surface level with any of this.
Zena: Exactly.
Nicole: So as a quick recap — the KYC, the Know Your Client form, is definitely something that’s going to come across your desk when you’re opening accounts and moving into this stage of the process. On the compliance piece, if you take one thing away from today, it’s this: ask questions. If it feels like this is being glazed over in a meeting, don’t be afraid to push back a little and say, “Tell me more about the protection and compliance piece. What does it mean for you to be compliant as my planner?”
And the third thing is the personal information. Understand that sharing personal details is just part of the process. It’s how we get to know you better so we can make the best recommendations for you.
Zena: Thanks for listening. At Astra, the education piece is something Nicole and I care a lot about. We want to fill up your toolbox, give you as much free information as possible and get you ready for retirement. Make sure to check out our website at astrafinancial.ca. We have Astra University on there with resources and a retirement course built specifically for Canadians. It has nine modules and gives you everything you need to get ready.
Nicole: Thanks again for tuning in. Make sure you subscribe and check out our other videos.
