Wondering if anyone in the group can recommend a patient, knowledgeable, and very well-performing financial advisor for those of us who do not speak “investment language?
This is a question I see come up on social media quite often, and the answer is… It depends. Let me explain:
Money Counsellors – they help create budgets, improve your relationship with money, they figure out a plan to get you out of debt, and they help you start to save.
- This is for you if you need to start taking control of your financial health.
Financial Planners – their main function is to create detailed financial plans that incorporate your expenses, savings and long term goals.
- This is for you if you want to know exactly where you stand in regards to your ability to make investments.
Financial Advisors – their main function is to give investment advice and their goal is to earn you the returns that you are comfortable with. They do this by selling you investments such as mutual funds or Exchange Traded Funds (ETF’s). These mutual funds or ETFs are usually managed by a third party.
- This is for you if you have a modest sum of money, and you’re ready to start investing.
Please note: The roles of Financial Planners and Financial Advisors often get confused. Some Financial Planners do offer limited investment choices.
Financial advisors providing investment advice can sometimes be thought of as providing a financial plan.
Wealth Advisors – their main function is to create a financial plan and an investment plan while providing you with investment advice.
- This is for you if you have a substantial amount of money to invest in more complex investments and you want those investments handled by someone who knows your financial plan and your goals intimately.
Portfolio Managers – their main function is much the same as a wealth advisor in that they create financial plans and provide investment advice. However, the main difference is that they create a portfolio customized for you and your financial plan, not selling you on the idea of a third party portfolio. A portfolio manager has been certified by the security regulators and been granted discretionary management authority by you the client. To be a given the title of Portfolio Manager, Investment Advisors must meet strict criteria in terms of education and overall investment experience.
- This is for you if are in the high net-worth category and want someone who will create and manage your customized investment portfolio at their discretion while managing your risk on your behalf without your direct involvement.
If someone asks you to recommend someone to help them with their finances, investments or retirement plan, or if you’re the one looking for expert help, here’s what I know from my 20 years in the financial industry:
You need to find the right person that you’re comfortable working with. You will be sharing intimate details about your financial life, your family and relationships, and long term goals. The person you work with will probably know more about you than your best friend does. It’s of utmost importance that your relationship is built on trust and respect.
The person you select to care for your financial well being must have the appropriate experience, education, qualifications and license to be the right fit for you, depending on your stage of life and financial needs. It’s also important that you are compatible and that you connect well with each other especially when it comes to how you communicate.
In regards to fees and costs, there will be a fee for all these services however generally the more they have to depend on third-party expertise the more it will cost you.
I suggest you interview 3 people before you choose someone. Ask a lot of questions and keep asking until you feel totally comfortable with that person so that you can make your choice with confidence. It’s a very important decision and not one to be taken lightly and I wish you all the best finding that right person.