Copyright 2005 Sharon Crawford
Do you know that establishing client trust and providing a high service level – not peddling RRSPs and life insurance – are keys to a successful financial planner career? Or is that financial advisor? These terms get used interchangeably (only Quebec regulates the term). Many professional associations exist – from Advocis (The Financial Advisors Association of Canada) – to the Financial Planner Standards Council (FPSC sets and administers education, exams, experience and ethics for Certified Financial Plannersä in Canada). Add numbers –Advocis estimates 35,000 Canadian financial advisors – and confusion is understandable. Theoretically, planners tell clients what to do financially and advisors suggest products.
According to Stephen Erochko, a CFPä since 2002, financial planners meet new clients several times to “document their complete financial picture and the best direction for their financial resources to achieve their goals.” This includes educational savings, mortgage payments, estate planning, taxes, insurance (life, disability, critical illness) and investments. Erochko, an independent consultant with the Investors Group, works from home plus two weekday mornings in that firm’s Toronto office. Investors supplies his financial software, pay commission for new business and “a residual for servicing existing business.” A licensed insurance broker, Erochko completes clients’ needs assessments and applications, and “recommends the most appropriate product.” When knowledge outside his expertise is required, he accompanies clients to meet lawyers and accountants.
According to Hamish Angus, Managing Director, ScotiaMcLeod, in banks and brokerages, financial planner candidates come from the existing field or have “a natural affinity for solving client financial problems.” Candidates require the Canadian Securities Course, a 90-day training course, to get registered as Investment Advisors with access to insurance, tax, debt and trust experts.
Corporations pay salaries or performance bonuses; independents work on commission, fees, or combination. Erochko suggests independents have back-up savings because building a client base takes time. Most activity occurs between November and April; he spends slower months marketing, while long-term planning with current clients. Erochko, who has a B. Math from University of Waterloo, accumulated nine years experience and developed a career network consulting to the financial services sector before considering financial planning. He self educated through the Canadian Securities Institute (CSI) and interviewed financial planning firms to match his career objectives.
The CSI also offers online courses, accredited with the FPSC. So do other institutions, including George Brown College with its four-year Bachelor of Applied Business. “This degree is the only applied degree in Financial Services in Ontario that includes majors in personal Financial Planning, Financial Services Management and Administration, and Accounting,” says Joshua Li, the program’s Notebook Computing Coordinator. After year one, students take one major. They use a notebook containing financial software and do a minimum one-semester co-op. “The Accounting stream focuses on accounting, auditing, and corporate finance.” Financial Services Management and Administration gives students “knowledge and skills for corporate, branch and electronic network positions, managing people, processes, marketing, database and the latest technology in financial industry.“The Personal Financial Planning stream prepares students to consult in investment, retirement, estate, tax and insurance planning. The curriculum prepares graduates for the Certified Financial Plannerä exam, leading to the CFPä designation.” Students also complete the Canadian Securities Course. CFP sä designation requires a licence (renewed annually) and 30 hours of continuing education yearly.
Many of those 35,000 financial advisors retire within 10 years, opening possible career doors.