Where To Go When You Need Financial Advice

Well, that requires some exploration. Here are some questions to ask yourself before taking financial advice from someone (and definitely before giving them any money or signing any contracts):

1. What are their certifications?

While it's possible to get great advice from someone who is experienced but un-certified, you’re taking a risk. Certification indicates that there is a certain level of training and supervision. A trustworthy certification will require the individual to have significant education and experience, ongoing professional education, and continuing oversight by a professional organization. Some examples of these types of certifications are: Certified Financial Planners (CFP), Chartered Professional Accountants (CPA), and Licensed Insolvency Trustees (LIT).

The above-mentioned certifications each have areas of focus, so you’ll want to choose someone who is certified to deal with your specific concern. For example, even the best CFP won’t be your best bet for insolvency advice, and even the best LIT won’t be the best source for tax advice. This means you might need a team of advisors to cover the various facets of your financial concerns.

2. How much experience do they have in their field?

The most experienced person isn’t necessarily the best – even with ongoing professional development requirements, sometimes a person who has just received a certification has the most up-to-date knowledge. However, there's significant value in having seen a lot of different situations after a lot of time working in that field. Find out how experienced they are and consider whether they have the right experience to help you.

3. How do they get paid?

Many not-for-profits are funded by government or large charitable organizations. For-profit advisors will usually either charge you a fee or receive a commission of some sort. Others might be funded by some form of special-interest group like a political or industry organization, or they may get advertising revenue from a website they run. In some cases, it'll be hard to determine how they're getting paid, but it’s important that you understand this, so that you can identify the extent to which they might be subject to bias. And if you're being charged a fee, make sure you understand the amount and timing of those fees up front, and don’t feel pressured to sign a contract before you feel comfortable.

4. What, if anything, are they promising?

If it sounds too good to be true, it probably is. High-pressure sales tactics and unrealistic promises are a sign that the person you're dealing with may not be legitimate or have your best interests in mind. The truth is, while a good financial advisor can provide advice and support, the success of your financial plan will most likely depend on you working hard and making good decisions over time.

5. What is their style?

There are a lot of great advisors out there who will not be your “cup of tea”. You'll get more benefit if you're comfortable with the way your advisor approaches problems and the way they manage their clients. For example, some will use a high-volume approach where they have well-developed materials and presentations but don’t have much time for one-on-one meetings or responding to your messages, whereas others may be less polished but use a more personal approach that also could require a bigger time commitment from you.

6. Check out their website and/or publications and reviews

If you want to find out more about an advisor, read up on them. See what they’re saying on their website and social media. See if they’ve produced any articles or done interviews. Find out what past clients are saying about them. This may help you get a feel for their knowledge and style. But like anything on the internet, take online reviews with a grain of salt.  Even if they’re legitimate, they are often given early on in a professional relationship based only on initial impressions. It’s always better to talk to someone who’s had past experience with them, if possible.

Okay, I know what you’re thinking… that's a lot of work. It does sound daunting, but it is very important to do your research before you trust someone’s financial advice. If you don’t, you are at risk to be a victim of a scam or someone taking advantage of your situation to sell you something you don’t need. Even if the source is legitimate, there are a lot of people giving advice about things they don’t know enough about – advice that tends to be wrong. If you aren’t able to take the above steps, ask for a referral from someone you trust that has taken these steps themselves. Or, start with an organization that you already know is legitimate and well-informed and seek recommendations from them.

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the southern Alberta region. We regularly help individuals review their options for dealing with overwhelming debt, and give them advice on implementing a financial plan. If you'd like some advice in this area, please reach out to us. We can also provide referrals to other organizations you might need support from.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.