It is estimated that there are about 150 fee-only financial planners in Canada. That is 150 individuals, not companies. Compare that to the fact that there are over 17,500 Certified Financial Planners (CFPs) across the country.
With so many CFPs offering free financial plans, why would you pay for one?
To answer that question, let’s first consider what a comprehensive financial plan entails.
- An analysis of your cash flow (current, future, and retirement)
- An analysis of your debts
- Illustrations of a variety of retirement income scenarios
- A review of your tax situation and potential tax savings
- An estate plan review
- Assessment of financial risks relative to your existing insurance package
- Investment analysis and recommendations, including a customized Investor Policy Statement
- Ongoing updates to ensure that you adapt to changing circumstances and stay on track.
Given the above, how many hours do you think a Financial Planner invests serving you?
To help you guess, here is a simple outline of the financial planning process.
- Gather all relevant information
- Assess and analyze the information
- Research if necessary
- Prepare analysis and recommendations
- Present recommendations
- Help with implementation
A properly developed comprehensive plan will take, on average, 15 – 25 hours of the planner’s time.
Now ask yourself, what business person or company would provide 25 hours of expertise and work for free?
Right, none!
If you are getting a “free” financial plan, it likely means that:
a) The plan is a loss leader. The planner is doing the plan with the expectation that you will purchase recommended products from them. As such, there is a built in conflict of interest motivating the advisor to build product recommendations into the plan. OR
b) You are not getting a comprehensive plan. OR
c) Both a) and b).
So if you are seeking a thorough, objective analysis of your financial circumstances without product influences, what do you think that’s worth?
Rona Birenbaum is a certified Financial Planner and is licensed to do financial planning. Rona is registered through separate organizations for each purpose and as such, you may be dealing with more than one entity depending on the products purchased. Rona is registered through Caring-for-Clients for financial planning services. This website is not meant as a solicitation for financial advisory services. Financial advisory services are available through the facilities of Queensbury Strategies Inc. Financial Planning is not the business of or under the supervision of Queensbury Strategies Inc. and Queensbury will not be liable or responsible for such activities.
