Hiring a financial planner can be a great decision for anyone looking to take control of their finances and plan for their future. However, it's important to do your research and avoid some common mistakes that people make when hiring a Canadian financial planner (CFP). Here are some of the top mistakes to avoid:
Mistake #1: Not doing your research
One of the biggest mistakes people make is not doing their research beforehand. It's important to look into the credentials and experience of any financial planner you are considering working with. You should also read reviews and ask for referrals from friends and family members. This will help you ensure that you are working with a reputable and trustworthy financial planner.
Mistake #2: Focusing solely on fees
While fees are an important consideration when hiring a financial planner, they shouldn't be the only factor you consider. It's important to find a financial planner who is a good fit for your needs and goals, and who you feel comfortable working with. Don't let the cost of their services be the only factor in your decision-making process.
Mistake #3: Not asking enough questions
Another mistake people make when hiring a financial planner is not asking enough questions. It's important to ask your financial planner about their experience, credentials, and investment philosophy. You should also ask about their approach to risk management and their track record of success. Don't be afraid to ask as many questions as you need to feel comfortable with your decision. For Example: Can you help with estate planning, insurance, tax planning, investment, and retirement planning? Are you an independent advisor who can offer any products and services from any major company? How are you compensated for your services? Do you use a letter of engagement detailing the services you will offer? Do you provide/use an Investment Policy Statement (IPS)? Where should I invest my money? (If they answer before taking the time to know you and your financial goals, this could be a cause for concern)
Mistake #4: Not setting clear goals
Before you hire a financial planner, it's important to have a clear idea of your financial goals. This will help you find a financial planner who can help you achieve those goals. If you don't have a clear idea of what you want to accomplish, it will be harder for your financial planner to create a customized plan that meets your needs.
Mistake #5: Not reviewing your plan regularly
Once you've hired a financial planner and developed a financial plan, it's important to review your plan regularly to ensure that it's still meeting your needs. Life circumstances can change quickly, and your financial plan may need to be adjusted accordingly. Don't set it and forget it – be proactive about reviewing and updating your plan as needed.
In conclusion, hiring a financial planner can be a great decision for anyone looking to take control of their finances and plan for their future. However, it's important to do your research, focus on more than just fees, ask plenty of questions, set clear goals, and review your plan regularly. By avoiding these common mistakes, you can find a financial planner who can help you achieve your financial goals and live the life you want.
I am here to help with your financial journey.
Best Regards, Paul Polyviou CFP, CLU