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Financial advisor: how to find the right one?

A few years ago, Marie-Pierre Larin’s personal finances were on the verge of disaster. “I spent lavishly and I was always in debt. I stubbornly refused to establish a budget. For me, rigorous management of my money was synonymous with deprivation,” she says.

Then, without warning, the pandemic arrived. And Marie-Pierre questioned herself. “I realized that I was no longer able to live with financial stress. I decided to go get help,” says the young thirty-year-old who lives in the Beauharnois region, on the outskirts of Montreal.

While attending entrepreneurship training, she met a counselor who gave her the tools to get her finances back on track. “I completely changed my attitude towards money. I make myself a budget, which I respect, I contribute to my RRSP and I no longer have the impression of depriving myself if I don’t spend,” says this student in neurolinguistic programming.

Unless you are passionate about stock market investments, insurance products and Excel spreadsheets, there is little chance that you will know in depth the keys to good management of your personal finances. It is for this reason that advisers can guide neophytes. But who should we do business with? A financial planner, a wealth manager, a mutual fund representative, an investment broker?

In fact, not knowing where to turn is completely normal. “The terminology used in this field is not easy to understand”, admits Antoine Bédard, senior director of customer assistance at the Autorité des marchés financiers (AMF), the sector’s regulatory and supervisory body. financial institution of Quebec.

Target the right person

Before starting the search for one or more representatives, you must define your needs. Do you want to have a global vision of your portfolio, acquire financial products, assess the feasibility of a project, improve your protections or a bit of all of the above?

If you want to get an overview, you should consult a financial planner, like Fabien Major, who compares his work to that of an architect. “This expert studies your situation as a whole: tax aspects, insurance, budget, allocation of investments, etc. », says the main partner and founder of Équipe Major. He will then develop a plan that will achieve the desired objectives.

Only people who have taken the training and passed the exam of the Institut québécois de planification financière (IQPF) bear the title of financial planner. “This guarantees clients that their representative has extensive training in the field,” says Chantal Lamoureux, President and CEO of the Institute.

Note that a professional with the appropriate training can do financial planning without using the title, because it is the use of the title that is legislated, not the deed. An accountant can therefore do financial planning, for example, without officially being a financial planner.

Outside Quebec, anyone can claim the title of financial planner.

If you are thinking of buying insurance products, such as life or disability insurance, you contact a financial security advisor. “This professional sells all the products offered by personal insurance companies, which includes segregated funds, a type of investment similar to a mutual fund,” specifies Antoine Bédard, of the AMF.

If you are looking to optimize your investments, several stakeholders can provide valuable assistance: the mutual fund dealer, the investment dealer or the portfolio manager. Each title delimits a field of action.

Thus, a mutual fund dealer can only offer mutual funds, while an investment dealer can also recommend individual stocks or bonds. A portfolio manager has carte blanche. “He has the power to modify your investments at any time, taking into account your best interests”, explains Fabien Major.

One specialist, several titles

Most professionals have more than one title. “A planner can also be an advising representative and a financial security advisor. This gives it the opportunity to offer a range of services to its customers. It’s an option that many people appreciate,” explains Chantal Lamoureux, of the IQPF.

How to find the rare pearl? The most effective way, according to Antoine Bédard, remains word of mouth. You can also consult the IQPF directory, which lists financial planners according to their location, or the – not very user-friendly – ​​register of the Autorité des marchés financiers. Once we have spotted a few of them, we interview them. “We find out about their permits, their training, their experience, their history, their method of remuneration and the way they assess our situation,” continues Antoine Bédard.

In short, we shop. “It’s important to find someone you can relate to. Otherwise, it won’t work,” says Fabien Major.

How much does it cost ? Several methods of remuneration coexist in the financial services industry. For example, financial institutions do not directly charge fees to their clients for the advice they provide. Instead, they pay themselves by selling financial products. “Since people are generally reluctant to pay fees to access financial planning services, this way of doing things helps to make advice more accessible,” says Chantal Lamoureux.

As for financial planners, many work on a fee basis, like a lawyer, not on commission. “The cost depends on the assets under management and the complexity of the client’s situation,” says Fabien Major, who bills this way. In the industry, the fees vary on average from 1% to 1.7% of the value of the investments. There are also financial planners who work on an hourly rate, but these are rare birds…

Training to get there

Before turning to a professional, you can deepen your knowledge of personal finance by following the training courses of the Institut québécois de planification financière, on the website planifié.org. “Our 14 modules prepare for the first meeting with a professional,” says Chantal Lamoureux, from the Institute.

The Autorité des marchés financiers also offers the document online Choose your representative – 9 principleswhich outlines the elements to consider before choosing your financial services advisor.

Fraud, how to avoid it?

Before entrusting your money to a financial services advisor, contact the AMF Information Center (1 877 525-0337) to find out if this person has the required authorizations to sell investments or insurance. We then require complete information on the investments offered and we ensure that the documents submitted are true. To do this, we visit SEDAR, a site that contains data from members of the Canadian Securities Administrators (CSA). Finally, we are wary of promises of fabulous returns. Easy wins don’t exist!

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