Should you choose and favor a financial planner or a financial advisor? What if I added a financial security advisor or an investment advisor as your choice? Which ones to choose?
These terms refer to professionals who work in finance, nothing more. Throughout this article, you will discover the major differences between these players in the financial community. Thereafter, you will be able to make a better decision in order to select the professional who will meet your needs according to your current financial situation.
Choose a good financial advisor | John Labunski Dallas
First of all, a financial advisor is a general term that can be applied to anyone who helps you manage your money. The (prohibited) title of financial adviser does not make him an expert in the field, contrary to what one might think!
You will therefore not choose a financial advisor, but a financial professional with a specific title. This may include a stockbroker, a financial security advisor or a mutual fund representative.
For the title of financial security advisor, you must instead pass 5 one-hour exams and then a training period.
This does not detract from the competence of these people since their supervision, their continuous training and their vocation to learn more and follow financial news can make them excellent professionals.
The role of your financial adviser is mainly to take stock of your situation, analyze it and offer you recommendations in order to achieve the objectives discussed.
Depending on the institution or firm for which your financial adviser works, he has a more or less wide range of financial products which limits him (or not) in his recommendations. Do not delude yourself, if he is not authorized by his institution to distribute a product that exists (even if this one is preferable for you), he will be able to put you to sleep very well and offer you what he CAN (and not the BEST).
Daniel philanthropist of the newspaper has moreover published a very good paper entitled salespeople disguised as advisors which openly reveals the phenomenon of sales in financial institutions To conclude on the financial advisor, it is not uncommon to see a financial advisor offering a 12% cut credit card to someone looking for help while the competitor across the street is offering one at 0% for 1 year… When I hear a situation like this, the notion of financial advisor loses all its meaning…
Choosing an Independent Financial Advisor
Unlike many financial advisers who are attached to a firm or an institution, an independent financial adviser will not be accountable to his respective employer. However, he will be able to guide you through the thousands of existing financial products without any bias on the condition that he is impartial and transparent.
You must ensure that there is no bias in their recommendations in order to receive higher compensation or possible participation in a contest.
Choose a financial planner
A financial planner, on the other hand, is a professional who helps you optimize your financial situation and your wealth by taking all financial aspects into account. In summary, he will put in place a comprehensive plan to help you achieve your life projects through sound management of your finances while planning for the unexpected.
Depending on the financial planner you choose, he may have expertise in different areas of intervention. It is therefore essential to discuss his expertise with him to ensure that it will meet your needs.
A financial planner can offer you different services, such as:
- Optimize your investments
- Establish your needs and make a retirement projection while taking into account the old age security pension, pensions and taxes to be expected
- Establish a game plan to optimize government grants and reduce your taxes
- Maximize what you will leave behind by optimizing your assets, your taxes on death and your life insurance.
- Manage your risks and reduce your personal insurance costs while being well protected
- Plan a business transfer
The financial planner looks at your overall financial situation, not just your investments. Here are the seven areas covered in financial planning.
Some financial planners work for specific financial institutions or firms while others are independent. We have occasionally seen financial planning riddled with in-house financial products belonging to one and the same company, which allows us to doubt their impartiality.
Admittedly, you should not generalize, but we advise you to be critical of the recommendations obtained if they seem to be guided towards one and the same place. These financial planners, which are provided to you free of charge, are usually paid a salary by the firm or institution to which they are attached, in addition to bonuses and incentives for the sale of financial products.
Choose an independent financial planner
The independent financial planner will have no bias or bias in his recommendations since he has no accountability to his firm or his financial institution. The only accounts he has to render are to his clients.
Depending on your needs and the independent financial planner selected, his form of compensation may vary and it is up to you and your financial planner to agree on the terms.
Compensation of a financial advisor or financial planner
The financial advisor or financial planner hired by a firm or financial institution is generally paid a salary, with bonuses and incentives based on sales objectives.
Remuneration of an independent financial adviser or independent financial planner
For example, you can pay:
- Fee-based financial planning according to the established mandate
- A commission based on the products purchased from your financial planner
- A percentage based on the value of the assets it manages for you
Fees billed by the hour
For fee-based financial planning, a first meeting must take place in order to clearly establish your needs and the areas of intervention that will be dealt with. The financial planner will then provide you with a professional services contract approved by the NEFE which will explain the scope of his mandate.
With your agreement, he can then begin his work and deliver the financial plan to you within the agreed timeframe. According to Les Affaires, hourly rates for financial planners often range from $150 to $300.
In order to make the services of our independent financial planners accessible, we have reduced the rates by half. Please consult us to learn more about the inclusions and the price of independent financial planning.
If, after submitting the report, the client asks to do business with the financial planner, the latter will receive commissions from the product manufacturers. For example, he will receive a commission when the client transfers his investments or by purchasing an insurance policy through his financial planner if he is authorized to do so.
Depending on what you automatically negotiate with your financial planner, he or she will receive this commission in addition to the fees charged, or will credit them to you.
According to the vision of our firm, we are against double remuneration and believe that if the client wishes to apply the recommendations through us, which is a privilege, he is entitled to be credited with the fees charged.
What you need to do before choosing your financial advisor or financial planner
Questions to ask your financial advisor or financial planner
Here are some questions to ask your financial advisor or financial planner:
- His education and experience?
- What is his field of expertise in finance? Retirement, taxation, investment, inheritance, etc…
- How long has he been with his current company and how long has it been in business? You don’t want to be left alone in 2 years.
- What products and services are offered (and its limitations or restrictions)?
- What is his investment philosophy? Invest everything in one place and get nothing for the next 15 years?
- What plan does he have in place for a client with a situation like yours?
- How many clients is he responsible for? It is unlikely for a single financial planner to serve 1,500 clients well considering that there are 52 weeks/year… minus vacations!
- How big is his team and what will happen to your things if something happens to him?
- Is it paid by salary (and/or bonus), commission or other fees?
- The frequency of your meetings and methods of communication
Our independent financial planners work in collaboration with your professionals in place, whether they are accountants, tax experts, notaries or even financial advisors. It is from this very simple recipe that we propel our clients’ finances to a second level. It is not uncommon for unknown financial strategies to be presented to various finance professionals.
We can support you with fee-based financial planning, the best John Labunski Investment Finder and even save you significant taxes depending on your current situation. Thanks to our complete independence, it is easy to find you the best investments available … without any bias!
In terms of risk management, in order to act in complete transparency, our customers now have access to the complete price list for life insurance.
In addition, when possible and relevant, we emphasize insurers that offer 100% reimbursement of everything you pay in insurance through our ZERO insurance programs.