Choosing a financial advisor is an important decision. This professional will guide you on insurance, budgeting, investing and long-term planning, so it’s worth taking the time to evaluate candidates carefully before you hire anyone.
People often use “financial advisor” and “financial planner” interchangeably. No matter the title, you want someone who will help you build a clear, realistic plan tailored to your goals and circumstances.
“How a doctor forms and explains their diagnosis matters more than the prescription,” says Adam Chapman, Certified Financial Planner (CFP) and founder of YESmoney in London, Ont. “If the diagnosis is off, the treatment won’t help. The same is true of financial planning.”
Below are practical tips to help you evaluate a potential financial advisor so you can find the right match for your needs.
Which type of advisor best fits your needs?
One of the hardest parts of the search is deciding what type of advisor you need. That choice depends mainly on what you want help with and how much ongoing involvement you prefer.
Financial advisors can be hired for a single task—such as creating a retirement plan or advising on a specific investment—or for ongoing guidance covering retirement, taxes, insurance and estate planning. You might hire help if you’re facing a major life change like retirement, divorce, or a career shift, or if you want to improve your overall financial situation.
Consider how much of the work you want to do yourself:
Option 1: The advisor creates a plan and you implement it. This works if you have the time, confidence and knowledge to carry the plan out.
Option 2: The advisor both creates and implements the plan for you, providing hands-on, ongoing management.
Key questions to ask a financial advisor first
At your first meeting, avoid immediately sharing all your personal details. Instead, ask focused questions to judge whether the advisor is a good fit. Chapman recommends asking these questions in this order:
- “Who is your ideal client?”
- “How do you help your ideal clients?”
- “What common problems do you help them solve?”
- “Who do you not work with?”
- “How do you get paid?”
Clear, direct answers to these questions show the advisor knows their niche and can communicate their services. It’s also important that you feel comfortable with the person personally.
The payment question is particularly crucial. Ideally, you want an advisor whose fees come directly from you, which reduces the chances of external influences or conflicts of interest. If an advisor earns commissions for selling specific investments, insurance products or mortgage deals, that can affect the objectivity of their recommendations.
How to do a background check on an advisor
Do your homework before hiring anyone. Verify credentials, licensing and disciplinary history.
Look for recognized professional designations such as Certified Financial Planner (CFP), Chartered Life Underwriter (CLU) or Registered Financial Planner (RFP). Confirm with the issuing organizations that the advisor remains in good standing and has completed required continuing education.
If the advisor sells investments or insurance, check with relevant regulatory bodies to confirm licensing and to see if there are any disciplinary actions on record. For investment professionals, tools exist through industry regulators where you can check registrations and any history of enforcement. For insurance, verify licensing with your provincial or territorial regulator.
Ask the advisor for client references if you want firsthand feedback, but remember these references are typically satisfied clients selected by the advisor.
Where to find a financial advisor
Search for advisors online, ask friends and family for referrals, or consult the organizations behind recognized credentials. Professional associations and regulator directories are useful places to confirm qualifications and find advisors who match your needs.
MoneySense offers a Find a Qualified Advisor tool listing advisors who are active members of the Financial Planning Association of Canada (FPAC) and hold at least one recognized financial planning designation. The directory allows you to filter by location, specializations and other criteria.
Take your time—spend a couple of weeks interviewing prospects and comparing services, fees and communication styles. This process matters: the right advisor can help you reach financial goals sooner and avoid costly mistakes, while the wrong advisor could hinder your progress.
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- How financial advisors can help at different life stages
- Watch: Tips for choosing a financial advisor
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