Are you looking for an fee-only financial planner?

Should you pay down debt or invest in your RRSP?  Should you buy a home or continue to rent? Do you have enough to retire and what source of income should you draw from first, second or third?  Are you looking for ways to reduce taxes? As a business owner, how can you best structure your affairs to meet both the needs of the family and the needs of the business?

These are all common questions when seeking the professional guidance and advice of an independent, fee only financial planner.

A fee only financial planner provides financial planning services based on a flat fee or an hourly fee, similar to the way in which other professionals, such as accountants and lawyers charge for their professional services.

Fee for Service Financial Planner:

Is a fee for service financial planner the same as a fee only financial planner?  The terms fee only financial planner and fee for service financial planner will be used inter-changeably throughout this page.  These terms mean the same thing from our perspective.

Independent Financial Advisor:

Is an independent financial advisor the same as a fee for service financial planner?  The term financial advisor more commonly refers to an individual registered or licensed to sell a specific product and to then receive a commission.  Financial advisors are typically employees of banks, mutual fund companies and insurance companies. An independent financial advisor is someone who typically owns their own business, maintains their own staff, operates in their own location and is registered as an investment advisor, mutual fund sales person or licensed insurance advisor, and provides these services through a mutual fund dealer (mutual fund products) or managing general agency (MGA, for insurance products).

Many financial advisors provide financial planning services typically from using industry standard software.

WHAT IS A FINANCIAL PLAN?

A financial plan is both a document and a process designed to help you answer several important questions and achieve important financial planning benchmarks.

The Financial Planning Document:

The financial planning document is typically designed to help you answer your most important financial questions:

  • Your Current Situation:  Where are you today financially?
  • Your Goals:  Where do you wish to be financially in the future?
  • Risks:  What are the risks that could derail your plans?
  • Strategies:  How should you best allocate your income and capital to achieve your goals?
  • Outcomes:  If you follow the steps outlined in the plan, where might you be financially in the future?
  • Recommendations:  What steps should you take today to achieve your desired outcomes?

Common questions that relate to different financial situations can be found here.  Are these the types of questions that are on your mind today?  

The Financial Planning Process:

To answer these questions, it is imperative to have a clearly defined process with clearly defined benchmarks.  The financial planning process used by Nelson Financial Planning Corp. focuses first on your financial core (your Net Worth, your Income, your Tax Picture and your Expenses) and then projects these values forward based on different sets of assumptions and scenarios.

In this way we can begin to see:

  • the pros and cons of different decisions,
  • how your income allocation strategy will have a direct impact on your net worth, tax plan and expenses,
  • how you can connect the dots between multiple, complementary strategies.

Financial Planning Benchmarks:

How do you know if you have found the most optimal way to achieve your financial goals?  As a fee for service financial planner, Nelson Financial Planning Corp. begins by setting some benchmarks:

  • Benchmark #1:  Something is only as good as to what you compare it to.  Financial Planning analysis must be broad and deep. This means that it is extremely important and necessary to compare a wide range of different ideas, options and strategies in a detailed manner, so as to determine the best overall approach.  To determine the best approach, the analysis must not be limited based on specific products, nor should it be influenced by the licensing or registration category of the advisor. An independent, fee for service financial planner is less likely to be influenced in this way, and best suited to provide a broad and deep analysis to determine the most optimal strategies to help you achieve your goals.  It is also really important to use comprehensive financial planning tools. In our view, many software tools over simplify taxation, accumulation and retirement withdrawal strategies, resulting in less than ideal outcomes. Therefore, it is imperative to make broad and deep comparisons between different scenarios and strategies so as to fully determine the most optimal approach going forward. Why is this important?  Because something is only as good as to what you compare it to.
  • Benchmark #2:  Pay attention to the 5 Great Killers of Wealth.  If we understand what can destroy wealth, then we can plan ahead proactively to make sure the impact of these things is minimized.  For more information on this, see our video.
  • Benchmark #3:  Does the recommended approach help you pay less tax, take less risk, reduce fees and expenses, help you retain more income and build more wealth?  We explore each of these areas in more detail here.

Are you wondering if you are allocating your income and financial resources in the most effective way? Are you wondering if you are on track to achieving your financial and lifestyle goals? If so, then a well-researched financial plan can help give you the piece of mind and clarity on how best to achieve your goals.

SELECTING A FEE For Service FINANCIAL PLANNER

Who is a CFP professional?  

What makes the difference between different types of financial planners?  Can any financial advisor be qualified to write a financial plan? In Canada today, anyone can call themselves a financial planner.  However, one way to differentiate between different types of planning professionals is their credentials. The most common standard is that of the Certified Financial Planner (CFP), which also includes practice standards, ethical standards and ongoing continuation education requirements.

Another standard has been set by the Knowledge Bureau with two designation programs called the Distinguished Financial Advisor (DFA) and Master Financial Advisor (MFA) and their defined process called Real Wealth Management.  Real Wealth Management is defined as the process of accumulating, growing, protecting and transitioning income and wealth on a sustainable basis over multiple generations.

The advisor team at Nelson Financial Planning Corp. are comprised of CFP and MFA professionals.

How do I choose a financial planner?  

Here are 10 Questions You May Wish To Ask Your Financial Planner.  With these questions in mind, it is important to recognize that much of the financial services industry today is controlled or influenced by investment or insurance product sales.  As a result, the financial planning process can be an after-thought, provided only if you first purchase a product from the advisor. In many instances the planning process is greatly over-simplified, resulting in plans that are comprised of inappropriate assumptions or strategies.  In some instances, the planning solution is determined by the product solutions available from that company. If the range of product solutions are typically limited by those products available from that company, then so too may be the planning advice. But worse yet, the type of financial advice provided can also be directly influenced by the product license held by the advisor.  The more limited the product license, the more limited the product selection, the more limited may be the advice.

In the end, the most important question for both advisors and consumers to ask is, do you really know what you don’t know?  Many well-meaning advisors can be providing well-intentioned advice, but we believe it is the responsibility of the fee for service financial planner to i) look at a wide range of issues, in a comprehensive manner, ii) so as to determine how best to allocate your hard earned income and resources so that iii) you are able to achieve all of your financial goals today and over time while managing risks proactively along the way.

Independent Financial Advisor or Fee for Service Financial Planner?

“I wish I could work with someone who wasn’t trying to sell me something”.

This is an increasingly common comment we hear people say, who are seeking the advice of an independent, fee-only financial planner.  Since  most financial advisors in Canada today are employees or commission sales people to large financial institutions, such as banks and insurance companies, more and more people today seek out the advice of a financial professional who is independent of a large financial institution.  Canadians are preferring to pay a fee to receive high quality, independent advice to make sure they have organized their affairs as effectively as possible. Canadians want to receive a truly customized solution, not one that is printed from a generic software program or one that is over simplified.  This is the role of the independent, professional, fee-only financial planner: to build a customized plan, without any connection or expectation related to the sale of a product.

NEXT STEPS:

In this section of our website, we have strived to explain the differences between a fee for service financial planner, a fee only financial planner and an independent financial advisor.  We have talked about the makeup of a financial plan and how the financial planning process needs to contain several important standards and benchmarks so as to help determine the most optimal approach going forward.

To learn more about our financial planning principles go here:  https://nelsonfinancial.ca/introduction/

To learn more about our financial planning process:  go here: https://nelsonfinancial.ca/financial-planning-corp/what-we-do/

To learn more about our retirement planning process go here:  https://nelsonfinancial.ca/retirement-planning-videos/

To contact us to set up a complementary meeting time, go here:  https://nelsonfinancial.ca/financial-planning-corp/getting-started/