Financial Planners:

The term "financial planner" is broadly used in Canada by a variety of financial services professionals.  As a consumer, it is often difficult to wade through the myriad of information and determine what services are being provided and at what cost when seeking financial planning services.  Currently anyone in the financial services sector can use the term "financial planner" to market or describe his / her skills.  However, there is only one registered and governed financial planning title in Canada and that is the Certified Financial Planner Designation or the "CFP" as it is often referred to.  The CFP designation is conferred and monitored by a not-for-profit organization called the Financial Planners Standards Council (FPSC) of Canada.

Certified Financial Planners have taken extensive courses and examinations to earn this professional designation and they must participate in annual continuing education programs to maintain their CFP status.  Furthermore, they must ensure they operate their planning practices in accordance with the FPSC's stated ethics and guidelines.  Detailed information regarding the designation, the FPSC and helpful consumer information can be found on their website:  www.fpsccanada.org.  The FPSC website also lists registered planners in your area and you can use this resource to confirm that a planning professional you are interested in working with is indeed a CFP designation holder in good standing.

Certified Financial Planners are compensated in a variety of ways but in essence compensation breaks down into three possible models:

Fee for Service

The planner will charge a fee for any services rendered.  This fee can be calculated based upon an hourly rate or a flat fee negotiated at the time of engagement.

Fee for Service and Commission

The planner will charge a fee for the development of a financial plan and will also receive a commission (either from the consumer or from the product provider, for example, a life insurance company should life insurance be purchased) for any product purchased to assist in meeting the stated objectives of the financial plan.

Commission only

The planner will be compensated solely by commission generated from products that are purchased to fulfill the objectives of the plan.  Commission may be paid by the consumer or by the product provider.

Each of these models has its pros and cons and it is important that consumers ask when interviewing a prospective planner to ensure they fully understand how the planner will be compensated.  It should also be noted that some planners provide strictly planning services.  Other planners may provide planning and can also assist consumers with their investing or insurance needs.