Look for a financial adviser who will take a holistic approach: expert

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TORONTO – Given the plethora of professional designations for financial advisers – a myriad of abbreviations covering everyone from planners to investment managers to experts on aging and divorce – shopping for money advice can be daunting.

“It’s sometimes difficult to sort through the alphabet soup of different types of designations and titles being used,” says Lucy Becker, a spokeswoman for the Investment Industry Regulatory Organization of Canada.

In a bid to help investors locate the right professional, IIROC – a national self-regulatory organization that oversees investment dealers – has created an online glossary of the various designations.

Neil Gross, the executive director of investor rights group FAIR Canada, recommends enlisting the help of a financial planner, who will take a big-picture approach to a client’s finances and devise strategies to help the client meet his or her goals.

“Everyone who needs financial advice should be looking for someone who is going to take a holistic approach to their situation, because financial decisions can’t be made in isolation from a lot of other factors, such as what’s going on in your life currently,” says Gross.

Gross cautions that in most parts of Canada, financial planning is not regulated, although Ontario has struck a working group to review the issue.

“Outside of the province of Quebec, anybody can call themselves a financial planner,” says Gross. “That’s a real problem for consumers.”

Gross recommends looking for an individual with the certified financial planner, or CFP, designation, which requires a “relatively high level of training” to obtain.

Those looking for advice on how to invest their savings could find themselves consulting an investment adviser. These are professionals employed by investment dealers and registered with securities regulators to be able to buy and sell a variety of products including stocks, bonds and mutual funds.

Of course, determining the type of professional needed is only the first step in the process. Once the desired qualifications have been identified, consumers need to find the right individual.

Gross suggests asking for recommendations from family or friends.

“You can do research online, but you never know about the quality of what you’re seeing there,” says Gross, who recommends interviewing a number of people before deciding who to work with.

Greg Pollock, president and CEO of Advocis – an organization that represents Canadian financial advisers and planners – also says it’s a good idea to interview a couple of advisers before ultimately settling on one.

It’s important to ensure not only that the professional has the right credentials, but also that their training is up-to-date, says Pollock.

“Things are changing very quickly out there in the financial services world, so it’s important that they are current in terms of their product knowledge,” says Pollock.

Pollock says clients should also feel they have a good relationship with their advisers, and that the advisers understand their clients’ financial goals and needs.

“If it doesn’t feel right, you should probably just walk away.”