What's the difference between a financial planner and a financial advisor?

When it comes to managing your personal finances, you may need the help of a professional. Financial planner or financial advisor? Which one should you choose? Find out how to make the right choice to achieve your financial goals.

Whether you want to save, buy a home, prepare for a child's post-secondary education, invest or plan for retirement, you don't need to have a lot of capital or an advanced finance degree to call on a financial services professional. In addition to offering their advice on financial matters, knowledge of financial products and tips on how to grow your assets, these professionals can save you precious time and stress!

A financial planner can offer various types of specific advice and services, taking into account financial, tax, insurance, investment, retirement, estate planning and legal issues. This specialist may work for private firms or financial institutions – offering a specialized service for major accounts such as corporations – or as an independent expert. Their services are billed on an hourly or flat-rate basis.

The title of financial planner is obtained following university training leading to a Certificate in Financial Planning. It also requires membership in a professional association, the Institute of Financial Planning (IFP), and a certificate from the Autorité des marchés financiers (AMF).

A personal financial advisor manages day-to-day finances. The title designates mutual fund representatives, investment or financial security advisors, insurance brokers or agents, or employees of financial institutions.

Such a specialist may work for a bank, credit union, caisse populaire or insurance company, as a savings plan or mutual fund broker, or independently. They are paid by the organization that employs or represents them, and/or through commissions on their sales. To advise and sell investment products, they must complete training recognized by the Investment Industry Regulatory Organization of Canada (IIROC) and hold an AMF licence.

A financial planner can help you achieve your long-term financial goals by developing strategies that are tailored to your needs. They take a holistic approach, taking into consideration your finances, your assets and your professional and family situation. Based on a personalized financial plan, they can, among other things:

• evaluate your financial situation;
• determine your financial needs and goals;
• work out your budget with you;
• propose strategies to reduce your taxes;
• present certain financial products;
• plan your retirement;
• prepare an estate plan.

Your financial advisor will help you manage and grow your capital. They can offer you a variety of financial products:

• mutual funds;
• segregated fund contracts;
• insurance policies;
• banking and financing packages;
• investment products, such as an RRSP, RESP, TFSA or FHSA.

This person can help you choose the right insurance coverage and investment solutions for your financial projects. They can provide you with general or specific advice, depending on their level of expertise and specialty.

Before meeting with a financial professional, determine your financial goals by asking yourself the following questions:

• Are my plans for the short, medium or long term?
• Do I need specific advice, or insurance or financial products?
• Do I need a financial plan?
• Am I looking for financing (real estate, property, business), investments (savings, retirement, post-secondary education) or insurance (life, health, disability)?
• What instalments, investments and budgets am I considering?
• Would I rather deal with an institution or an independent expert?

You can prepare for this exercise by downloading our free budget tool now, to get a clearer picture of your financial situation.

When choosing your consultant, ask yourself a few questions about this person:

• Do they have an AMF permit?
• Are they a financial planner or advisor?
• What are their official qualifications and certifications?
• What are their areas of expertise? Do they match what I'm looking for?
• What types of products and services do they offer?
• Are they a fiduciary (in other words, do they have an ethical and legal obligation to act in the customer's best interests)?
• What experience do they have? Do they have references?
• How are they paid for their services?

When it comes to personal financial planning, your child's education can also be an important consideration! In this case, a scholarship plan representative may be able to help.

A scholarship plan representative is an education savings specialist. They are in the best position to advise you on RESPs (Registered Education Savings Plans), a valuable investment for your child's future education.

Opening an RESP gives you peace of mind about your little one's educational future. Interested in an RESP? Kaleido's education savings specialists are here to help and support you. And that's not all! Kaleido RESPs also offer exclusive family coaching for your entire family, including family finances.

Finding a financial planner or advisor means choosing someone who understands your situation and your needs. It also means establishing a relationship of trust with someone who can help you achieve your financial goals and bring your projects to life. Identifying your needs is the first step towards making the right choice and achieving financial peace of mind!