- What kind of professional designations and expertise should a financial planner possess?
- What do the letters ‘CFP®‘, ‘RFP’ and ‘CLU’ mean?
- What should we bring to the first meeting?
- How do you know what investments to recommend?
- How often do you keep in touch?
- How are you compensated of paid?
- What should we do if the stock market starts to go down?
- What can we expect from the financial planning process?
- Can you provide us with references?
What kind of professional designations and expertise should a financial planner possess?
As a member of the Institute of Advanced Financial Planners (IAFP®), a Canadian professional financial planner would hold the designation of CFP® and RFP. Expertise in areas such as investments, insurance, business administration, law, money management and tax strategies would be of most benefit. Most financial planners are general planners, with specializations in one or more areas. Financial planners should have fostered close working relationships with accountants, lawyers, investment counselors and other competent professionals of which can be called upon to offer specific knowledge or expertise dependant on the service required.
What do the letters ‘CFP®‘, ‘RFP’ and ‘CLU’ mean?
‘CFP®‘ identifies a Certified Financial Planner. ‘RFP’ is a Registered Financial Planner who has pursed their education further by proving their ability to apply their knowledge to a wide range of complex cases using a comprehensive planning process. The RFP designation / mark is symbolic of individuals who are dedicated to a high level of professionalism within the financial planning industry. In the absence of a uniform government regulation for financial planners, the RFP credential assures clients that, CFP®/RFP licensees have agreed to adhere to strict standards of competence and ethical practice set out by the Financial Planners Standards Council (FPSC).
The CLU® is Canada’s premier wealth transfer and estate planning designation. The CLU® is recognized in the financial services industry, and is respected by clients and their financial practitioners. It implies competence in the area of estate planning and wealth transfer. CLU® designated practitioners are in the unique position of helping their clients build and preserve wealth.
Standards set out by the FPSC include:
- Successful completion of an approved educational program.
- Must agree to continuing education requirements; to maintain highest level of current planning strategies, and financial trends
- Minimum of 2 years work experience in a financial planning related position
- Successful completion of a rigorous examination that covers the financial planning process, tax planning, employee benefits, retirement
planning, estate planning, investment management and insurance
- Adherence to a professional Code of Ethics which requires all CFP® licensees to act in an ethical and professionally responsible manner in all services and activities
Ideally you should bring current statements of investments, income tax summaries from the previous 2 years, notices of assessment from those years and information such as pension estimates and group savings provided by your employer. If you want to set up an investment account, we will need to see photo ID and collect other personal information, including your social insurance number.
An understanding of your investment preferences and personal circumstances will assist us in identifying key issues in the development of your individualized portfolio. This process involves close scrutiny of you current financial position, marginal tax rate, future investment objectives, liquidity requirements, income needs, long-term portfolio growth expectations and short-term fluctuations. Also of importance are discussions around issues such as health status, health benefits, travel plans, and leisure activities.
In addition to issues mentioned above in answer #3, consideration is given to allocating your assets across various investment classes, such as fixed income securities and equities. Investment managers and funds for each asset class are carefully selected based on company statements, personal interviews and observations, and professional reports. Using independent software to compare and review management and statistical measures, such as:
- Management styles (i.e. value, growth, etc.)
- Reasons for changes in management
- Unusual changes in growth
- Management expense ratio (MER)
- Consistent performance over short and long terms
- Asset composition (i.e. regional holdings and type of bond issuer and maturity)
- Standard deviation (measure of volatility)
- Tax efficiency (i.e. capital gains, dividends or interest)
It is important that you provide us with the ‘big picture’ perspective by making us aware of valuables, real estate, and financial assets with other institutions. It is our primary goal to reduce risk and increase tax efficiency.
Please contact us if you have any questions or concerns about anything related to your accounts, investments and insurance in general. We are pleased to serve as your primary source for obtaining information and answers relating to any planning issues, tax and other financial needs.
We actively monitor all of our client accounts. Generally, we review your portfolio and financial situation at least once a year.
Our primary form of compensation is service fees/commissions paid by investment institutions, on your behalf, for placing and monitoring your assets. Service fees form part of the management expense ratio, which is an annual percentage fee charged by all investment funds. This method of compensation works especially well for your pension and registered accounts.
Our secondary form of compensation is an hourly fee. Hourly rates apply if we agree upon a financial plan or service in which advice is not contingent upon the placement of your investments. Usually this fee-for-service agreement is determined in advance.
Nothing. There is no need to panic.
A key to investment monitoring is using appropriate indicators to determine performance. A good method of evaluation is to revisit the fundamentals of your investment and income objectives and then compare your expectations to your portfolio’s bottom line return. You should also compare the long-term performance of your individual investments to peers within this asset class.
We continually investigate new investment products and monitor proven investment vehicles. We review federal and provincial budgets for tax advantages and analyze ‘new’ tax strategies.
At any time you may request a personal review or email update of your account.
Financial planning involves identifying how individuals can meet their life objectives through proper management of their financial resources. Sound Financial Strategies uses this broad-based approach to providing financial advice to allow for a complete investment strategy rather than a piece-by-piece approach that only focuses solely on individual area’s of a persons financial life.
Yes. Many of our clients gladly offer their names and contact information as references. These are available upon request.