Monitoring investments is not a walk in the meadow. While some people may be comfortable supervising their money, others not so much. Therefore, they hire a financial advisor to:
- Manage their present financial situation
- Assess present and future investment goals and objects
- Provide advice on financial matters with objectivity
Choosing the correct Fee for service financial planner is crucial since you are handing over your money to them. Inquire your friends and family for references to hire specialized services.
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How to Pay a Financial Advisor in Canada?
The payment procedure in Canada for financial advisors factors the nature of the client’s service.
The financial advisor is payable through
- An hourly rate has been agreed to receive advisory service regarding a financial plan.
- A commission or a fee for the financial advisor to purchase a stock
- A percentage of the client’s assets that the financial advisor is managing. It is called the management expense ratio.
Assuming you do wish to work with a financial advisor in Canada, remember to clear the air
- Regarding the services which the client is seeking
- The cost of said services
- The nature of payment to the financial advisor, such as salary or commission
Not every financial advisor in Canada will be the same. Some may provide helpful advice, while others are more influenced by materialistic factors such as market dominance and client greed. Furthermore, the nature of payment chosen will also motivate the financial advisor accordingly.
A commission will motivate the financial advisor to invest in the assets since their income is linked to the client’s financial performance. However, a salary-based financial advisor will result in the promotion of the client’s assets or services.
What to As a Financial Advisor in Canada?
There is no need to fret if you are stuck on choosing the right fee only financial planner! We suggest studying their credentials and qualifications. Ask them about their portfolio and take notes as a client. Do not make a decision in haste. You can ask the financial advisor the following questions to aid the decisions making process:
- Ask about their academic background
- Inquire about their job description, job title, designation, and certification
- Ask how long they have been employed in the said firm
- Ask if they are registered with the securities regulator in Canada
- Ask about the services the financial advisor is offering
- Ask about their contribution to your life goals
- Ask whether they wish to be paid in commission, salary, or hourly
- How often does the financial advisor meet with the clients
- What is their mode of communication, and how often do they communicate
- References and testimonials for previous clients
- Whether or not they are licensed to provide certain services
- Are they monitored by any regulatory authorities
- What are their terms of conditions and registrations requirements for hiring clients
- Whether or not the firm is being investigated by securities regulators in Canada for discrepancies or non-compliances
What Will the Advisor Ask the Clients?
Financial advisors can also inquire about their clients since communication is a two-way street. Following are a few questions they will ask before creating a financial plan:
- The client’s age
- The client’s yearly income
- The net worth
- Information about dependents such as spouse and children
- Monthly expenses and their categorization
- The direct tax paid on income earned
- The client’s know-how regarding prior investment experience
- Investment objectives
- Gearing risk—how tolerant is the client to invest in different situations
- How often will the client require withdrawals from the investment?
About Us
Merrick Financial Inc. offers fee-only financial services. It is a combined adaptation of impartial advice for independent and successful residents from Toronto. Generally speaking, Canadians have received sound financial advice, so let’s keep the trend going by scheduling an appointment here online.