Fee-only planners/advisors(Canada/U.S.)

In a nutshell

If you are thinking of using an advisor, aim to get one working on a fee-only basis, prepared to offer a fiduciary relationship and includes an Investment Policy Statement as part of the deliverable.

The details

The education function of RetirementAction.comis focused in helping individuals to become Do-It-Yourself (DIY) investors; the information contained here, hopefully, also helps those who are not prepared to go it alone but still desire to learn about personal/retirement finance topics just to become more knowledgeable customers of advisors. In fact I often get asked by readers if I would become their advisor (no…I don’t provide advice to individuals at this time), and if not, could I recommend some advisors  who desire a little customized help to get started.

If you are one of those who would like to explore the use of an advisor, some of the criteria you might consider in the selection of who you’ll put on your short list, should include: fee-only planners, and those prepared to have a fiduciary relationship with you.

The highest payoff activity, that you can engage a planner/adviser in, is in developing your Investment Policy Statement (IPS) which is the roadmap to achieving your goals. The investment policy statement includes: goals/objectives, risk tolerance, return requirements, constraints (horizon, tax, liquidity,…) which in turn to lead to a Strategic Asset Allocation (SAA) and a low-cost ETF-based implementation. If you are in the accumulation phase of your life-cycle you’d want to have the required savings objectives defined, while if you are in the in retirement (or decumulation phase) it would also include the withdrawal strategy (annual percent, from what accounts, etc). With the IPS in hand you might be ready to open an account with a discount online broker and implement the recommended portfolio. You could do your own periodic rebalancing to maintain the recommended SAA, and if desired you might return to your fee-only advisor every 2-3 years for a professional check-up: refreshing the IPS, check to see if you are still on-track toward your objectives.

So where might you start looking for the right advisor for you? Without making specific recommendation, you could start looking at a number of articles/lists which include fee-only (and other types of) advisors (I should add that I have no personal experience with these lists or advisors on the list):

Canada:

“Where to find a fee-only financial planner” (Duncan Hood in CB Online MoneySense, January 11, 2009)…the list is organized by province

“CFP list of Financial Planning Standards Council”where you can enter the ‘city, province’ that you are interested in and specify ‘fee-only’ under “Advanced Search” option.

“Institute of Advanced Financial Planners” …this site includes fee-only, fee-based and commissioned advisors and there is an option to search for planners specifying various criteria (thanks to Jonathan Chevreau for suggesting this possibility)

In “Where to find a true fee-only planner” Jonathan Chevreau explains difference between fee-only and fee-based planners and mentions the names of a few fee-only planners

U.S. (source is personal finance writer Liz Pullam Weston):

“Garrett Planning Network”

“National Association of Personal Financial Advisors“

And finally, if you are considering exploring advisors you might also be interested in one of my couple of years old blogs on the subject on “Choosing an Advisor”.

(Thanks to JT for suggesting the topic.)