Financial Advisor or Financial Planner: Which One is Right for You?

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The first thing to understand is that the title of Financial Advisor does not exist in Canada, but Financial Planner does exist.

The majority of people you meet who work in the industry will have one of the following titles:

  1. Financial security advisor
  2. Mutual fund dealer representative (personal finance advisor)
  3. Financial planner

As I experienced on the job nobody really looks at your title. If you would ask any of my clients what I am for them, they would say a financial advisor. But what they don’t know is that legally I can’t say that I’m a financial advisor since it’s not a regulated title.

I think the misconception is created because of so many counseling professions that have the noun advisor in their titles.

It acts like an automatism, and everyone goes to say a financial advisor or sometimes for a financial planner even if you are not.

Responsibilities of financial professionals:

Among the things they have in common is that they are all governed by a provincial financial services regulatory policy. They are the ones who give them the license and they are the ones who can disbar someone if they commit serious misconduct.

So that they can practice their work, the authorities ask them to follow certain rules.

One of the rules that displeases a lot of clients is the in-depth analysis of their life.

But why so many questions !!!

It feels like sometimes people forget it but money is a serious matter.

And that’s how the government sees it. That’s why they put regulations.

That being, means that for each product that these professionals offer to their client they must justify it.

If the authorities were to do an audit, they would question the professional about why they offered one product over another..

You shouldn’t see this as selling a product because it’s not, it’s a SERVICE.

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Particularities of the professionals:

The Financial Security Advisor is an expert in insurance of persons AND segregated funds.

When we talk about insurance of persons, we are talking about life insurance, critical illness insurance, disability insurance and accident insurance.

So, once this professional has done the needs analysis of the client, he will be able to tell what is most urgent and most appropriate for the client.

Then there is the Mutual fund dealer representative (personal finance advisor) who is mainly an expert on mutual funds. If he works at the bank, he will also offer loans and insurance-linked to these loans.

But be careful, he cannot sell insurance to persons INDIVIDUALLY because the law does not allow him, that’s right only the Financial Security Advisor has.

Finally, the financial planner has several fields of expertise. He has the same knowledge as the other two professionals above and also more in-depth knowledge of taxation and everything related to estate planning.

However, the Financial Planner, even if he has the knowledge of the other two professionals, can only give the solution. If the client wants to apply the solution he will have to do it with the others unless the planner obtains the same licenses.

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So basically, it would be like if he knew how to drive but he did not have the license to do it. That’s why they all go through the process of getting it otherwise it wouldn’t make sense.

Which one is right for you?

If you are the average Jo, you will be perfectly well served with a Financial Security Advisor and or a Mutual fund dealer representative (personal finance advisor). On the other hand, if you have a much more complex situation, for example, a company. The Financial Planner might be a better option.

However, that does not mean that other professionals could not offer you the same services. Because many of them will have colleagues in tax law, financial planner, accountant, etc. that could team up and give you the best service.

So if you have any doubts, you just have to question it.

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