What Is A Financial Planner? – Forbes Advisor Canada

A financial planner will help you chart a course for your financial life, from budgeting and saving to minimizing your tax burden to leaving a financial legacy for your children. If you’re thinking about hiring a financial planner, here’s what you should know.

What does a financial planner do?

When you hire a financial planner, they will help you understand your financial goals and how you plan to achieve them. Financial planning goals include things like buying a new home, investing for retirement, providing funds for your children’s education, or deciding what insurance products you need.

A financial planner will analyze every aspect of your situation and use their expertise and insights to help you optimize your budget and spending to meet your goals. This can include strategies for paying off debt, ideal asset allocations for your retirement savings, and advice on financial products to buy to make your dreams easier to achieve.

Financial Planner vs. Financial Advisor

The terms financial planner and financial advisor are often used interchangeably. In fact, both types of professionals offer financial planning services to help clients achieve their financial goals.

However, financial advisors are generally considered to be a much broader category. They can include many types of financial professionals, from a stockbroker or an insurance agent to an employee of a financial institution.

Financial planners actually fall under the term financial advisor, but financial planners are limited to more targeted services that usually have a greater focus on helping you achieve your long-term goals.

Types of Financial Planners

It’s important to note that “financial planner” is itself an unregulated term. In Canada, anyone can call themselves a financial planner and offer financial planning services. Some may specialize in certain aspects of planning, such as retirement or tax management, while others take a more holistic approach. A select few may not even have your best interest at heart and are best avoided.

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While any Canadian can call themselves a financial planner, there are actually three Canadian financial planner job titles: Certified Financial Planner, Personal Financial Planner, and Registered Financial Planner.

Quebec is a little different than the rest of the country. Only trained persons may use the title “Finanzplaner” or in French “planificateur financier”.

Certified Financial Planner

A Certified Financial Planner (CFP) holds the most recognized financial planning designation in Canada. The requirements to earn this designation include completion of a rigorous training program, passing a national exam, and evidence of three years of qualifying work experience.

To retain their designation, CFPs must complete 25 hours of continuing education each year. They must also adhere to a standard of professional responsibility, including ethics, which dictate that the interests of their clients come first.

When choosing a financial planner, it is a safe practice to choose a CFP.

Personal Financial Planner

Personal Financial Planner (PFP) is another leading term for comprehensive financial planning in Canada. Recognized by Canada’s largest financial institutions, the PFP designation ensures that financial professionals have the knowledge and skills to understand all aspects of a client’s financial situation.

Similar to a CFP, personal financial planners must meet several requirements such as: Examples include completing an approved course of study, passing an exam offered by the Canadian Securities Institute, and adhering to a code of ethics.

Registered Financial Planner

Registered Financial Planners (RFP) focus on comprehensive financial planning that addresses six practice disciplines: financial evaluation, tax, estate, risk, investment, and retirement planning.

You must meet several requirements, e.g. B. Practice as a financial planner for at least 3 years, demonstrate their skills by submitting a fictitious financial plan for peer review, meet educational requirements, pass an exam and more.

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Do you need a financial planner?

While almost anyone could benefit from the services of a financial planner, the truth is that not everyone needs one. If your finances are fairly basic — meaning you’re working, have some money saved, and are putting money into a retirement account — you might not need a financial planner.

However, a financial planner can help you if your finances are more complex or your situation changes, such as B. if:

  • You get a significant stroke of luck. If you find yourself in a sudden influx of money – such as Whether it’s a large bonus from work or an inheritance from the death of a loved one, a financial planner will work with you to develop a plan for the money to ensure you can meet your goals.
  • Your income changes. If you get a new job that significantly changes your income, a financial planner can help you create a new budget and adjust your pension contributions.
  • You will marry. When you get married, you and your future spouse can meet with a financial planner to discuss how to deal with existing debt, save for a new home, or plan for children in the future.
  • they get divorced Financial planners can also help you deal with difficult situations like a divorce. By working with a financial planner who specializes in divorce, you can receive assistance in determining child support and alimony, dividing personal property, and understanding tax laws.
  • A new child comes into the family. If you are anticipating or planning an adoption, a financial planner can help you decide what type of life insurance policies you need and how to save for your child’s post-secondary education.
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How to choose a financial planner

If you decide to work with a financial planner, there are a few things to keep in mind:


Aside from evaluating their education and years of experience, look for financial planners with designations such as Certified Financial Planner, Personal Financial Planner, or Registered Financial Planner.

Aside from their references, it’s important to make sure they have your best interests in mind. The members of the Financial Planning Association of Canada (FPAC) are a good starting point for finding the right planner.

payment structure

Financial planners can be paid in a myriad of different ways. Some rely on commissions from the products they recommend; others charge a percentage of the wealth they manage for you. Still others charge hourly, or have a monthly or yearly fee. Make sure you know how your financial planner will be compensated for their services before entering into a relationship with them.

Typical clientele

Even general CFPs can specialize in certain types of clients, such as doctors, attorneys, or those with large student loan debts. Ask potential financial planners about the types of people they typically work with and the types of services they typically provide. This way you can ensure that you are choosing a professional who has extensive experience in dealing with the types of financial problems that you face on a regular basis.

Formal Complaints

Unfortunately, not every financial planner is a good actor. Before entering into a relationship with a financial planner who has access to confidential financial information, check their references and disciplinary history. If complaints have been filed against them, these could be red flags.


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