Choosing the Right Financial Professional for your Investments

Some tips to help you choose the right financial professional to sort out your investments.


John Liu - Financial Gain

I’ve written a bit about my distrust for the personal finance industry in Canada, given there’s room for plenty of conflict of interest and product recommendations that aren’t in your best interests. Self-educate or be taken advantage of. Over in the U.S., a retirement account fiduciary rule which protects consumers from financial firm conflicts of interest is in the midst of being attacked. When corporate interests are put before consumer interests, you have to look out for yourself. Buyers beware. So, that begs the question: how do you find a financial professional that’s right for you?

What Type of Professional do you need?

Financial Planners

In Canada, financial planners will create a plan, assessing cash flow, retirement, risk management and asset allocation. It’s invaluable to have a plan before you start putting your money to work for you. It may be extremely cheesy, but, if you fail to plan, you plan to fail. What financial planners generally won’t do is suggest specific products or make trades for you. That gets into the realm of financial advisors.

Financial Advisors

Professionals with this title will look at your asset allocation, willingness to accept risk and suggest actual financial products (stocks, bonds, mutual funds, ETFs, etc.). They may also make trades for you, depending on the service levels they provide.

Note: There are absolutely firms that offer both services. It’s just important to be aware that there is a distinction between the two types of professionals and the services they can provide.

Tips on Choosing a Financial Professional

So you’ve figured out what you need, be it a financial planner, an advisor, or both, so what’s next?

  • In general, what you’re going to be looking for is a “fee only” professional. They will generally charge an hourly rate. If you’re looking for an advisor that actually manages your portfolio, you may be getting into “percentage of assets under management” territory.
  • Ideally, the person you work with should not receive a direct commission from the specific investment funds they suggest. This is important, because it removes a substantial conflict of interest. If they’re pushing their own products, and receiving a commission for it, whenever you buy or sell, they’re less likely to suggest lower fee, better suited options. Directly ask them how they’re paid.
  • Don’t be tricked by an impressive sounding combination of letters, following a person’s job title. Ask what the designation following a professional’s title indicates. Is the designation managed by the financial industry, or administered by an independent organization? The CFP (Certified Financial Planner) designation in Canada is one of the more recognized designations, despite it not touching on index investing.
  • You’re going to want to avoid banks and large financial institutions. Unfortunately, while you may have a longstanding relationship with them, they make money by selling overpriced financial products. Their advisors lean more towards salespeople, which I’m uncomfortable with.
  • If you want index mutual funds or index ETFs, it’s important to ask upfront whether this is something they advise on. Not all financial designations provide education on these products.
  • You’re also going to want to assess how responsive the professional is, and how easily you can have a conversation with them. If you can’t get in touch with or understand them, they’re not someone you’re going to want to work with over the long-term.
  • Oh yes, finally, avoid insurance companies when looking at investments. This may sound obvious, but they’re extremely likely to try and sell you an array of insurance products instead of actual investments. It’s true that you can tax shelter money within the investment portion of a life insurance plan, but why wouldn’t you just buy an actual investment?


  • For Canadians, Holy Potato offers a list of fee only financial planners and coaches.
  • MoneySense also provides a list of approved financial advisors. I’d go with the Holy Potato list first. The MoneySense article is a pay for listing service.
  • Preet Banerjee has a good, far more detailed write-up on choosing a financial planner.
  • MyMoneyCoach has an article on how to find a financial advisor
  • Despite everything I’ve said above, Steadyhand is a solid option, if you’re comfortable with actively managed mutual funds and associated fees. I’ve suggested them a couple of times before, despite the fact that I would not use them myself. They’re probably the best pro-consumer actively managed mutual fund firm in Canada.

Header image by John Liu – Financial Gain // CC by 2.0

Author: sylint

I'm a business analyst, working in Information Management and Information Technology. Technically, I'm a librarian, though I prefer to think of myself as professionally varied.

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