Financial Frequently Asked Questions

What is financial planning? Financial planning is the process of meeting your life goals through the proper management of your finances. With every one of the countless steps that make up a life, there are choices. Choices that often lead to new goals. Buying a home, saving for a child's education or planning for retirement, are all good examples. Financial planning is a step-by-step process that helps you reach your goals by gaining perspective on where you are now and defining where you may want or need to be in the future. It provides direction and meaning to all your financial decisions, defining each in context with the other, how they are all part of a whole. In this way, financial planning should help you adapt more easily to life changes and keep you on track. Once the process is understood, it is a simple matter to see just about how anyone can benefit from some level of financial planning.

How do I know if I need the advice of a professional financial planner? When in doubt about your finances, it is a good idea to ask professional advice. Financial matters can seem, and often are, complicated. If you are in doubt as to your ability to make the most of what you have, for the future, it may be time to consult a professional. Risk evaluation, retirement plan maximization, financial emergencies, estate planning, inheritance: these are a few of the many areas in which a professional financial planner could be beneficial, and at times, crucial to your long-term well being. Even if you haven't any doubts about your financial planning expertise, you may simply feel that you do not have the time to devote to looking after your financial matters. There are many reasons to consult a professional, all of them valid. When it comes to your financial affairs, it's usually worthwhile to take the view: when in doubt, ask the expert.

How is a financial planner different from a financial advisor? Financial planners are individuals who know how to use the financial planning process, the big-picture approach, to help you figure out how to meet your life goals. They examine and explore all your needs and can help you with budgeting and saving; and tax, investment, insurance, retirement and estate planning. While they make work with you a single financial issue, it is always within the context of your overall situation. This big-picture approach to your financial goals sets planners apart from all other financial advisors, who may have been trained only to focus on one particular area of your financial life.

How do I know if my financial planner is qualified to help me? Not everyone who calls themselves a financial planner is a Certified Financial Planners professional. There exists in Canada a very confusing mix of designations and acronyms for financial advisors who may or may not be qualified to give you the kind of big-picture and unbiased planning advice you need - even if they say they can. FPSC is the standard-setting and licensing not-for-profit organization that licenses individuals who meet rigorous qualifications in experience, education, examination and ethics to earn the professional designation of Certified Financial Planners or CFP. Finding the CFP trademark logo, letters, or the words Certified Financial Planner beside the name of a financial planning practitioner, will ensure that you have identified a professional who has been educated in, examined for, and has experience in all aspects of financial planning. You will know that you have found someone who has agreed to adhere to a strict code of professional conduct known as the CFP Code of Ethics. Additionally, you will know that the planner has made a life-long commitment to continuing education (30 hours per year) to keep their technical skills and theoretical knowledge current.

The CFP four-step qualifying process includes the successful completion of a 6-hour examination that is based on regularly up-dated research and in-depth reviews of what planners do. The topic coverage for the exam is developed from a syllabus that outlines 166 topics and additional subtopics covering areas of: estate planning, investment planning, retirement and employee benefits planning, insurance planning, income tax planning, fundamentals of financial planning and the Code of Ethics. To qualify to write the exam, the candidate must successfully complete a program of study (many of which take three years) approved by FPSC. Or they must hold a professional designation and three years experience in a field related to financial planning. Additionally, all licensees must have at least two years financial planning experience (three for those qualifying to write the exam through a professional designation).

Where can I find a CFP licensee? Today there are more than 13,000 CFP licensees in Canada. And the designation is recognized world-wide with 62,000 CFP licensees having earned the designation from organizations in 15 countries. CFP licensees work in every segment of the financial services industry: in banks, credit unions, the securities industry, insurance companies, full-service financial groups, accounting firms and other areas.

You can contact the FPSC at: 416.593.8587 or inform@cfp-ca.org.