There are thousands of financial advisors in Canada, with varying qualifications and expertise. It’s important to find someone you trust to manage your money for the long term, and who connects with you on a personal level. But how do you choose the right one for you?

The term “financial advisor” is vague, and anyone from a bank employee to a stock broker may call themselves one. The Financial Consumer Agency of Canada (FCAC) differentiates the more general financial advisor, who could be a bank worker or an independent investor, from the more specific financial planner, who helps you create a plan to reach your long-term savings goals.

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FCAC notes that it’s important to understand how an advisor is paid before you choose them. Some are paid on commission, while others charge a flat fee or percentage of the assets they manage. It’s also possible to find a dual-licensed financial advisor who can help you navigate the intricacies of cross-border investing, like RRSPs, TFSAs, and IRAs, and avoid costly penalties by moving your investments across the border.

Only individuals and firms registered as portfolio managers are held to a fiduciary duty, meaning they are legally bound to put their clients’ interests first. The rest of the Canadian financial advice industry is held to a suitability standard, which means their recommendations must be suitable for each client’s profile and objectives.

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