What to expect when you’re planning

Now it’s time to talk about what to expect when you’re working with a financial planner.

Last week I explained the truth about financial planning — feeling free to live the life you want with the resources you already have.

There are two key elements to working with a financial planner that allow you to achieve financial freedom: their process and their expertise.

The process

While each financial planner has their own specific approach, the planning process includes six core components. Here’s how it works:

  1. Establishing the engagement: You and your planner confirm your roles and responsibilities, specific services to be provided and fee. These details are outlined in a written agreement known as the engagement letter.
  2. Determining your goals and expectations: Your planner gets to know you as an individual and helps you set relevant financial goals. This includes talking about things such as your priorities, what you want to accomplish or experience in life, and what you hope to get out of the planning process.
  3. Clarifying your present financial status and identifying any problem areas and opportunities: At this point, you will provide your planner with specific details about your current financial situation, including what you own, owe, earn and spend. You’ll identify what your concerns are, what you’re struggling with, what’s going well and what resources you have at your disposal.
  4. Developing and presenting the financial plan: Your planner analyses your current situation in light of your financial goals and makes recommendations to help you achieve those goals. They will walk you through each component of your plan, explain the options available and help you decide on the best course of action for you.
  5. Implementing the financial plan: Your planner provides ongoing support to put the recommendations into action, including purchasing certain investment products and insurance, or engaging with tax and estate planning specialists, if needed.
  6. Monitoring the financial plan: You and your planner meet on a regular basis, usually annually, to review how you are doing relative to your plan, discuss any changes in your life and update your plan as needed.

The expertise

At this point I feel it’s important to clarify that in Canada (outside of Quebec), there is currently no regulation that restricts the use of the term “financial planner.” To ensure you are working with a qualified professional, you’ll need to validate their expertise, and the simplest way to do this is to look for specific professional designations that indicate they have the knowledge, skills and abilities to create and implement a financial plan that is right for you. A few to look for are the Certified Financial Planner (CFP), Registered Financial Planner (RFP) and Professional Financial Planner (PFP).

You can also gauge their level of expertise by their ability to explain personal finance concepts to you. As Albert Einstein said, “If you can’t explain it simply, you don’t understand it well enough.”

Bottom line

I believe the most important part of the planning process is Step 2: Determining your goals and expectations. No process or expertise can deliver on the promise of helping you live the life you want if the financial planner hasn’t taken the time to get to know what “living the life you want” looks like for you.

After meeting with the right financial planner, you should expect to feel that they prioritized getting to know you and your goals, and are able to explain financial concepts in a way that is simple for you to understand. If not, these are big red flags that they’re not the right planner for you.

Still not sure if working with a financial planner is the right move for you? In next week’s post I’ll help you figure it out.


The views and opinions expressed in this article are those of the author and do not necessarily reflect that of Chartered Professional Accountants of Canada (CPA Canada).

About the Author

Lisa Zamparo, CPA, CA

Lisa Zamparo, CPA, CA, is a financial planner in Toronto who helps young professionals learn how to make smart decisions with their money. Her personalized approach to financial planning helps her clients achieve their life goals by aligning their spending with their priorities. As a “Big 4″ trained Chartered Professional Accountant, Lisa believes the lessons learned from some of the best-run companies in the world can be applied to managing personal finances. She works with clients to apply these lessons and teaches them how to take control of their finances and their future.