Trust and money are like love and marriage, you can’t have one without the other. When you let someone into the financial side of your life, you want to ensure that you are dealing with someone who is reputable, someone who puts your best interests first. That’s why any successful relationship with a financial planner needs to be built on a foundation of trust.
What Title Can You Trust?
There is nothing more important than the hopes, dreams, and goals of you and your family. If you are going to enlist the help of a financial planner to help you achieve those crucial things, you want to ensure that they are knowledgeable, competent, and experienced – you can’t afford to have it any other way. Yet, the way the financial planning industry is currently constructed, it is not always easy to get the level of expertise you want.
There are a huge number of financial planners, financial advisors, and wealth managers out there. In fact, a mystery shopping exercise conducted by investment industry regulators found 48 different titles used across various industry platforms in Ontario. 48! It’s an impossible task to vet the credibility of every prospective person involved in “planning” when you see that many titles!
It is essential that someone who uses the title “financial planner” is qualified to do so, in the same way that you expect someone who uses the title of doctor, lawyer, or engineer is qualified to do their job based on the title they hold. In those examples, the title itself contains a set of criteria related to education, up-to-date knowledge and industry oversight, something that is lacking in the current landscape of financial planning. When you seek financial planning services, you face an array of titles and credentials without any assurances of expertise or oversight. It’s a confusing world out there.
Who Is Regulating The Industry?
The Government of Ontario recently published a consultation paper that echoed the confusion that exists for consumers looking for financial planning help. They outlined six areas of concern about the lack of regulation and the competency of financial planners, saying that the industry needs these changes:
✓ Ensure that holders of a recognized credential are able to meet a wide range of consumer needs
✓ Ensure planners have a solid educational grounding in the area of financial planning
✓ Ensure that there is an examination requirement to serve as an objective measure of the planner’s mastery of course material
✓ Ensure that planners abide by a code of ethics or standards, which will ensure that planners are required to act in an ethical manner and follow a standard of conduct in their dealings with clients
✓ Ensure a continuing education requirement which will require that planners keep up to date with changes as the marketplace evolves
✓ Create a disciplinary process and mechanism for revoking the credential when warranted. The disciplinary process results must be publicly reported and easily accessible for consumers, in a timely fashion.
These changes require that financial planners abide by a more uniform standard of education, expertise, and ethics. Not to brag, but these are the exact areas that we at the IAFP have been advocating for decades – attempting to create standardization across the country. We feel that you, the consumer, should be assured of your financial planner’s competency, and the best way to know you are getting the highest level of planning distinction is by trusting someone who holds the R.F.P.® (Registered Financial Planner®) designation, which is accredited by us, the Institute of Advanced Financial PlannersTM (IAFP®).
Trusting The R.F.P. Designation
An R.F.P. designation is the best way to know that you are getting a knowledgeable financial planner. We achieve this by creating comprehensive educational and examination requirements and a code of ethics and practice standards that planners must adhere to. When you work with an R.F.P., you know that they are putting you and your goals first. They achieve this by first creating a customized and comprehensive financial plan for you; this is done before any products are recommended, so you know that your plan is based on your goals, not any commissions. This comprehensive plan follows these six steps:
Step 1: Your Current Situation
An R.F.P. gathers all the necessary data from you and summarizes your current situation
Step 2: Your Goals
The R.F.P. works with you to establish your goals, priorities and concerns.
Step 3: Examining Those Goals
An R.F.P. will identify the problems and opportunities to achieving your goals
Step 4: The Plan
You are now given written recommendations and alternative solutions to get you where you want to go.
Step 5: Take Action
Now’s the time to take action on the plan, with the roles of implementation being clearly outlined.
Step 6: Review
Periodic reviews of the plan occur; updates and revisions are made to deal with any changes.
You’ll notice that steps 1 to 4 are all about you, without any mention of selling a product. The plan is foundational. When you finally hit financial products in step 5, an R.F.P. has already disclosed their fee structure and any conflicts of interest – a level of transparency that sets us apart from other financial planners.
It’s an R.F.P.’s upfront nature, their commitment to putting clients’ first, and their ongoing educational requirements that should make you confident in trusting someone who carries an R.F.P. designation. They have the training, the expertise, and the ethical standards to provide you with the comprehensive financial planning services that unlock your goals and dreams. It is a level of trust that is essential for a successful financial planning relationship, a relationship that is focused on achieving a better quality of life for you and your family. Find an R.F.P. today.
