When it comes to getting financial advice, many Canadians either aren鈥檛 working with a financial planner or don鈥檛 have a financial plan at all.
Only 25 per cent are working with a financial adviser and 30 per cent say they don’t have a financial plan at all.
That鈥檚 according to聽. The poll also found that a third of those surveyed said that the cost was the main barrier to getting a proper financial plan.
鈥淭here’s the cost and there’s also the uncertainty as to what the potential benefits are going to be,鈥 said Jason A. Evans, a certified financial planner at Evans Retirement Planning聽in Manitoba. 鈥淚 find when clients have done some reading on their own, and they’re a little bit financially literate, they start to recognize, oh, there’s all of these things that I could be doing.鈥
There isn鈥檛 a standard cost for financial plans. That鈥檚 because there are different financial plans, said Evans, who took a look at the rates of 25 advice-only聽Canadian planners聽and found the fees ranged from聽$1,200聽to thousands of dollars.聽
While the cost of getting a financial plan can be intimidating, it doesn鈥檛 necessarily mean that you can’t afford one. You can get a plan that suits your budget and your financial goals.
It鈥檚 about knowing what you need, what your goals are, and how the fee structures work.
What is a financial planner?
A financial planner is a licensed individual who helps you create a plan to reach your goals. This includes helping create a budget, estate planning services, insurance options, planning your retirement and identifying ways to save money on your taxes.
A financial adviser helps you manage your investments. Investment brokers, insurance agents and even people who work at the banks are a type of financial adviser.
Advice-only planners
These are planners who don鈥檛 sell insurance or investment products. They focus on planning around retirement, tax and estate planning, and financial coaching. Their rates are either hourly or on a per-project basis. 鈥淭he general trend was that you’d have the comprehensive plans and then, occasionally, you’d have some people offering a more focused set of plans,鈥澛燛vans聽said. Comprehensive plans take a holistic approach to your personal finances and include your income, expenses, retirement, insurance policies and investments. Focused plans include pension analysis or a retirement-only plan.
When Evans looked at his sample of 25聽planners, he聽found the聽highest minimum fee was $8,500 and the lowest was $1,200, depending on the type of plan.
鈥淚t really depends on the business, the firm you’re working聽with,鈥 Evans said. 鈥(They) can tailor it any way that they want to suit the needs of their clients.鈥
Investment firms
Investment firms will offer a complimentary financial plan for clients who are invested with them.
鈥淚t’s complimentary, if you have a minimum of a million dollars with a fee-based account or there is聽a聽fee-for-service,鈥 said Samantha Sykes, a senior investment adviser with Raymond James.
Several fees-for-services such as a stand-alone pension analysis or a retirement projection costs $250 plus tax聽at Raymond James. A core comprehensive plan, which includes people with income with personal savings and debt, people who are taking retirement income from personal accounts or defined benefit plans, or those who personally own up to six rental properties, would start from $900 plus tax at Raymond James.
Armand Wahab, CEO and founder of Greenstone Private Wealth in 海角社区官网and a certified financial planner, says that he took the complexity of creating individual financial plans into consideration when looking at the pricing.
鈥淲e’re seeing more clients coming to us saying, ‘Hey, I want a financial plan.’ We’re not worried about the products (like insurance) at this point. Let’s implement the solution based on their scope of work.鈥
Wahab has three price tiers. The basic tier is $1,000 for a basic financial plan. 鈥漈hey have a main residence and maybe an investment property which gives them a foundation to start building their financial plan.鈥
The next tier is $2,500 for individuals who need more planning such as retirement and the final tier starts at $5,000 and is usually for corporations.
Cindy Marques, a Toronto-based certified financial planner and CEO of MakeCents charges clients $2,000.
鈥淚’m typically working with individuals in their 30s, early 40s, who are going through major life changes,鈥 she says. 鈥淧lanning means starting a family or trying to buy a home or running a business on the side, et cetera. So I recognized that and I tried to keep my rates affordable.鈥
All the planners said that their plans include spreadsheets with built-in functionalities and tools. They have cash flow plans that can be used to track daily spending, retirement planning and other goals such as buying a home.
Marques says, 鈥淢y (rate) is not just for those documents. I would call it a container package where it includes not only the tools, but two sessions with me.鈥 She charges $300 for additional sessions that her clients often bank and use when they need to adjust their plan and want to chat with Marques.
Both planners say they work with clients to ensure they can afford their plans. Some might pay monthly or as their finances permit.
Banks
If you don鈥檛 know where to start when it comes to finding a financial planner, most major banks offer a service that includes financial planning with investing.
While there are no costs on their website, TD does say that you鈥檒l need a minimum of $100,000 in investable assets to use their financial planning services.
CIBC has something similar with their GoalPlanner for clients, who also need to have $100,000 or more in savings and investments.
Fintechs and apps
If you prefer to do it on your own and keep costs down, there are fintechs聽which are apps, technology and companies who use this technology to support or manage banking services聽like Planswell that聽provides聽free financial plans. While the plan is free, you may field calls from advisers wanting you to invest with them or purchase a financial product.
Apps like Mint, which recently shut down, and budgeting apps聽You Need A Budget聽(YNAB), Monarch Money and KOHO聽are a good way to start the financial planning process because they help you create and manage your budget. They鈥檙e also fairly inexpensive with YNAB聽at $99聽a year聽and Monarch Money costing $99 (U.S.) a year. KOHO is free as it is a service that comes when you open an account with them.聽
However, Sykes said the聽apps miss聽the personal element a financial adviser can provide, such as coaching and tailored advice.
What to ask a financial planner
When looking for a financial planner, make sure they鈥檙e credentialed and verified.
In Ontario, financial planners .
Ask them about their fee structure and how they are paid. Other questions to ask include whether they charge hourly or by project, and the cost of different plans.
Working with a financial planner can be rewarding, said聽all the planners.聽Evans聽says聽鈥渇or people who hadn’t taken those steps to educate themselves, it’s really a mystery as to what financial planning is, what’s covered, and how to make the adjustments that can totally be worth the upfront fee in terms of risk protection, optimizing investments and saving taxes.鈥
Sykes agreed. For her, the right financial plan is the one that works for you.
鈥淚t’s the one that you stick with. It’s like going to the gym, the one that you’ll use and you’ll revisit, because a financial plan is not meant to sit on a shelf.鈥
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