What role do you want a Financial Advisor to play in your financial affairs? Are you looking for a quick `tune up' to check on your current financial strategies? Do you want a continuing relationship with a financial advisor to provide ongoing independent advice?

Be clear in your own mind as to the level of help you're seeking and the role you wish the advisor to play, then select the firm that can best provide that level of expertise. Here are some questions to ask your prospective or current advisor:

What's their experience?
Currently in Canada, there is little restriction on anyone calling themselves a financial planner or financial advisor. Make sure your planner's experience is appropriate to the task.

Does he or she have the prestigious professional designation in financial planning, the R.F.P. (Registered Financial Planner), which is conferred by the Institute of Advanced Financial Planners? Other educational designations, coupled with the R.F.P., are indications of experience and education. You want someone who is fully familiar with the process of comprehensive financial planning, not just certain aspects; e.g. mutual funds.

How are they paid?
Most financial planning requires planning, not products, to achieve the stated objectives. There are two basic methods of remuneration - commission and fee, but often remuneration is hidden or indirect.

Some firms offer "free" financial planning. Their planners are compensated through commissions on products (insurance, mutual funds, etc.). Some planners may be compensated through ongoing participation in investment management fees, commonly referred to as `trailers'. Some may assess a fee for the financial plan and a commission for implementation of the plan. This method of remuneration is often called `fee-based', which should never be confused with `fee only'.

Still others, like Macdonald, Shymko & Company are "fee only" advisors. They accept no commissions and are compensated solely through professional fees levied to clients. This philosophy of no product sales is the cornerstone of our firm's long-term success. This allows the flexibility needed to provide a broader range of advice.

Each method of remuneration has its pros and cons. Only you can determine which is best for you.

Their role?
While the role of a Financial Advisor will vary for each client depending on their circumstance, the basic role of an advisor is to provide guidance, information, alternatives, and to allow the client to make informed decisions. An independent assessment is the cornerstone of any client/advisor relationship.