What do financial planners do?

The role of a financial planner would not only benefit from being better known and demystified, but the role should be made available to those who need it most. (Photo: 123RF)

GUEST EXPERT. Excellent question! The first answer that might come to mind would be, “Well, plan your finances.” But when you’re someone who doesn’t know the Quebec and Canadian financial system, with the multitude of roles and professionals found there, it’s not that easy to answer that question.

What is a financial planner? What is it used for? What is the difference between a financial planner and a financial advisor? These are the questions we are often asked at Code F. by the people we support. Especially since this financial literacy month, we are hosting the 2nd year of our free financial planning consultation.

So what is a financial planner?

If I believe what the Quebec Institute of Financial Planning (IQPF) says, a financial planner is “a professional capable of analyzing all aspects of your situation and then developing a personalized action plan to help you achieve your goals.” In particular, a financial planner will be able to analyze your current situation and develop strategies and recommendations in a personal financial planning report that integrates seven areas of financial planning, namely legal aspects, insurance and risk management, taxes, finance, investments, retirement. and succession.

It is important to note that only financial professionals who have completed training with the IQPF and have a license to practice issued by the Financial Markets Authority can hold the Pl title. Fin and carry out financial planning tasks as mentioned above.

What is the difference between a financial planner and a financial advisor?

This is what makes a financial planner different from a financial advisor. Financial advisor is a general term that combines many professions (eg: bank advisor, collective savings representative, personal insurance advisor, etc.) In short, they are people who have a specific license to offer you specific financial products.

In my practice, to better explain the difference between a financial planner, financial advisor, and financial coach to the people I support, I use the analogy of the healthcare system. In the (Quebec) health system, we have nurses, general practitioners and specialist doctors. The latter have different qualifications and functions in patient treatment/support. Taking this analogy, in the financial system:

• Sisters would be financial coaches (which can be found in Codex F.) or budget stakeholders (which can be found in cooperative home economics associations); they are the people who can help you assess your financial health and create a plan with you to improve and/or restore your financial health and offer you follow-up actions to help you better manage your personal finances, while also referring you to financial planners if needed and/or financial advisers with special permits. However, just as there are certain tasks that nurses cannot perform (especially tasks reserved for the medical profession), there are certain tasks that financial coaches or budgeting professionals cannot perform. This is mainly financial planning (as described above) and the sale of financial products, reserved for financial advisors with relevant licenses.

• GPs would therefore be financial planners, as the latter, with their analysis and advice that can touch on the seven areas of financial planning, have a 360° view of our financial lives.

• Because they must be specifically licensed to sell specific financial products and/or offer certain specific services (such as selling insurance products, selling mutual funds, writing wills, etc.), doctors in my analogy are financial advisors. Whether it is a financial security advisor (for personal insurance products), a collective savings representative (for mutual funds), a notary (for wills and others), a mortgage broker, etc.

Therefore, to simply introduce the role of a financial planner, I very much like to refer to a general practitioner or a financial doctor.

A role that would benefit from being better known

But if we want to continue this analogy, just as it is currently difficult to have a family doctor/practitioner in Quebec, it is equally difficult to access a financial planner!

The role of the financial planner would not only benefit from being better known and demystified, but the role should be made available to those who need it most, people in situations of financial vulnerability. Especially since not all Canadians, especially those with low incomes, have access to the financial advice they need to make good financial decisions, according to Prosper Canada’s 2023 report. A 2018 study by the Financial Planning Standards Board found that 73% of Quebecers do not have access to a financial planner.

Why? Several reasons, including the fact that there is currently a shortage of financial planners in Quebec and that most financial planners work for large financial institutions and/or work for wealth management companies where they only deal with people with relatively significant financial assets. Which, unfortunately, is not the situation for many Quebecers. As a result, financial planners are now considered only for the wealthiest, and people in vulnerable situations (who would most need their advice and support) are unable to access them and end up at a loss. serve….

Therefore, from 2022, with Codex F. Financial health for all, we organize a financial planning consultation every year. An activity for which we are recruiting financial planners (26 this year), registered with IQPF, who voluntarily come to meet (individually) people who would like to give advice and/or answer questions that arise about their financial situation.

Last week we had the opportunity to discuss the role of the financial planner, which we co-moderated with Charles Poulin, Chantal Lamoureux, CEO and IQPF, and Fabrice Fameni. If you were unable to follow the conversation on our social networks, you can replay it at the following link: https://www.youtube.com/@codeftv8314/streams

Also, if you would like to meet with a financial planner for free, there are still spaces available for our November 18th Financial Planning Clinic. To register >> https://mlf.codef.ca/evenement/la-clinique-f-clinique-de-planification-financiere-de-code-f

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