What good financial advisors do: they listen, interpret and help you implement a solid financial plan

Money Digest, June, 2000 by Chris Cahill

The financial services industry is largely unregulated and undefined as to who can call themselves a financial planner, advisor or consultant.

Given the fairly low licensing requirements and no apprenticeship standards for advisors, the public is open to the opinions of any newly licensed person who has passed a basic examination required by a regulatory body. Unlike a lawyer or a chartered accountant, there is no requirement to wait to practice. In essence after the licensing examination, the new advisors practice on the public.

So how would you identify a good advisor? Look for the following:

(a) A good advisor should have tenure. Sure, everyone needs to start somewhere, but wouldn't you want to know a period of apprenticeship has been attained?

(b) Every advisor should have some credentials or be working on them to demonstrate a level of commitment to their vocation above the very basic licensing requirements. The attached table may help.

(c) A good advisor should introduce you to the habits of excellent international professional money managers.

(d) Your advisor should monitor your progress to the written plan or compare it to the written plan on an annual basis and review your portfolio with you on a quarterly basis.

(e) Estate Planning. Once it has been established that you have enough assets to provide a comfortable lifestyle for you and the ones you love, a good advisor should assist you in considering charitable gifting techniques to reduce taxes now and ultimately at death.

(f) Your relationship with your advisor should be one in which there is a profound amount of respect for you, your family, your wishes and your desires.

Finally, remember that this is your money and you're in control. Question and challenge your advisors if you're feeling any vagueness and discomfort. Feel free to seek out second opinions. Stay educated and stay in power. A good financial advisor will make you feel relaxed, will listen intently and interpret your needs. You will know a good financial advisor by the questions he or she asks.

Canadian Financial Planner

Initials   What the initials stand for   Time invested to earn the
                                         initials

CLU        Chartered Life Underwriter    210 Hours
CHFC       Chartered Financial
            Consultant                   210 Hours
CFP        Certified Financial Planner   480 Hours
RFP        Registered Financial Planner  9 Hours (prerequisite: CFP)
CIM        Certified Investment Manager  510 Hours
FCSI       Fellow of the Canadian

Securities Institute 790 Hours (prerequisite: CIM