Everyone needs to pay attention to their finances—read your credit card statements, know what’s in your RRSP, etc. Yet, there’s comes a time in your life when that’s just not enough. When you’ve got a complex financial question, you don’t just need more financial literacy – you need the skills of a professional such as a certified financial planner. Yet, according to a recent Financial Planning Standards Council (FPSC) survey, 66 per cent of Canadians aren’t getting the professional help they need. Life events, such as buying your first home, marriage, birth of a child, loss of a job, receiving an inheritance, selling a business, and retiring are just some common examples where getting help can make a big difference in financial outcomes.

Jason Heath, a Markham-based, fee-only, certified financial planner with Objective Financial Partners says, “You should consider hiring a financial planner any time you have questions about your finances that go beyond your own expertise. Sometimes people have an investment advisor, accountant or insurance agent—someone with financial expertise— who is either unable answer all their questions, isn’t looking at their finances in a holistic manner, or who sells products and therefore may be biased. A professional financial planner is someone who is an expert in integrated financial planning. They can be hard to find. Some people call themselves financial planners but, really, they financial products salespeople.”

The term “financial planner” is not regulated. Anyone outside the province of Quebec can call themselves a financial planner, even if they have absolutely no training or expertise whatsoever. “It’s a real failure of the Canadian financial industry, regulators, and government,” says Heath. Every professional has a bias and Heath admits that he’s “deeply biased in this assertion, but I think that a fee-only, advice-only, fee-for-service financial planner is the best way to obtain truly independent and objective financial advice.”

CFP credentials: What do they mean?

According to Heath, “The Certified Financial Planner (CFP) designation comes from the highest professional standards-setting and certification body for financial planning in Canada. It really is the gold seal. There are other financial planning and financial industry credentials and certifications, but the CFP should be the bare minimum for consumers in Canada – as it is across the world.”

Red flags to look for?

“It’s not even the red flags I’m worried about. It’s the yellow flags,” says Heath. “Try to avoid anyone with outlandish promises or who isn’t registered with the provincial securities commission. Promises of high returns with low risk should also be taken with a grain of salt. But since most financial “advisors” in Canada are salespeople and not truly in the business of advising, you have to proceed with caution. Financial advisors are not fiduciaries and are not required to act in your best interest. The big red flags are an issue but there are lots of small abuses within the financial industry and those I see as a bigger concern.”

Fees vs. Commissions?

“Fee-only is a vague term,” says Heath. “It is not regulated, nor is it a guarantee of receiving a certain type of service. Fee-based investment advice means you pay a pre-determined fee as a percentage of your investments. A fee-only financial planner should be someone who charges an hourly or flat fee for financial advice and who doesn’t sell investments or insurance. Sometimes I use the term advice-only to really clarify. There’s nothing to stop a mutual fund salesperson from calling themselves a “fee-only financial planner” to appeal to the public.”

Advisors can be compensated in many different ways: a commission per buy or sell transaction, trailer fees from selling mutual fund products which are a percentage of a fund’s embedded management expense fee, while others sell financial products with up-front, deferred, or ongoing fees. “I expect a continued increase in fee-based or percentage fees for investments. And in the meantime, the demand for fee-only, advice-only, fee-for-service professional financial planning also continues to increase,” says Heath.

So, when searching for a financial planning professional, arm yourself with the right questions to ask. You can find a number of articles and videos on the subject at:  www.financialplanningforcanadians.ca and to locate a CFP in your area, visit www.findyourplanner.ca.

Kelley Keehn is an award-winning author, personal finance educator and is the Consumer Advocate for the Financial Planning Standards Council (FPSC). She has written nine books on personal finance including Protecting You and Your Money; A Guide to Avoiding Identity Theft and Fraud and A Canadian's Guide to Money Smart Living. Kelley is the Marilyn Denis show’s personal finance expert, was the host of the W Network’s Burn My Mortgage, sat on the National Steering Committee on Financial Literacy, currently serves on the Financial Consumer Agency of Canada’s Consumer Protection Advisory Committee, the Ontario Securities Commissions’ Seniors Expert Advisory Committee, and is a member of the OECD’s International Network on Financial Education.