We are all big fans of Retire Happy, so when Jim asked us to contribute, we were very excited. It has become one of the go-to sources for retirement planning for Canadians.
We pride ourselves on being go-to sources for objective financial advice for Canadians, so Retire Happy is a natural fit, given much of our practice focuses on retirement planning. For some people, retirement is imminent or current, while for others, it’s far into the future. Regardless, the ultimate financial goal for most of us is to retire happy.
Objective Financial Partners
OFP is one of Canada’s few advice-only, fee-only financial planning firms. As the media has come to endorse “fee-only” advice for its objectivity, the sheer number of advisors calling themselves “fee-only” has skyrocketed to capitalize on the endorsement. However, it’s important to clarify what it actually means.
In the olden days, fee-only meant an advisor who didn’t sell any financial products and was paid an agreed-upon fee – whether hourly, annually or by the project – for financial advice. Perhaps a better descriptor these days may be “fee-for-service” or one that we have come to use ourselves as of late: “advice-only.”
Unfortunately, the Financial Planning Standards Council (FPSC) that governs Certified Financial Planners (CFPs) like us doesn’t keep statistics on fee-for-service, advice-only financial planners. Estimates peg the number in Canada at about 150, compared to approximately 90,000 financial advisors. That means about 0.17% of Canada’s financial advisors don’t sell financial products.
Related article: What is financial planning?
The Different Types of Fee-Only Advice
Many portfolio managers who charge investors a fee as a percentage of their assets refer to themselves as “fee-only.” But there’s a big difference between someone who:
- is an investment specialist
- manages a portfolio of stocks and bonds
- charges a 1.25% fee
- generally works for a bank
- may have access to an in-house financial planner if your assets are high enough
. . . and someone who:
- is a Certified Financial Planner (CFP)
- builds retirement plans
- develops an investment strategy
- provides tax planning
- assesses insurance needs
- assists with estate planning
- charges an hourly, annual or project fee
- is independent
- doesn’t sell any financial products whatsoever
We have been contacted by plenty of clients over the years who have said they spoke to other “fee-only” financial planners, just to find that they were not who they thought they were after all.
Some people need a fee-only “portfolio manager.” Some people need a fee-only, “advice-only financial planner”. Some advice-only financial planners like us ultimately refer a client to a fee-only portfolio manager if it’s the right fit for their investments. Buyers need to beware and ensure they hire the right person in the first place.
Related article: Do you know how financial advisors get paid?
Following a 20-year career as an investment and insurance advisor with two large wealth management firms, Nancy joined OFP to focus on her passion for financial planning. She has a particular interest in financial planning for seniors and their adult children but works with single people, seniors and families at all planning stages seeking to take control of their financial lives.
Nancy is a Certified Financial Planner (CFP).
Brenda has spent the past 20 years working as a bank branch manager, new advisor trainer, college professor and financial planner. Whether she’s explaining a financial concept to one person or to a room of 100, Brenda’s approach to personal finance is that of education. After all, it’s much easier to follow advice when you understand it. She has a particular interest in working with clients and their advisors and in financial education for employees but works with people from all walks of life.
Brenda is a Certified Financial Planner (CFP).
Jason is one Canada’s best known fee-only financial planners, having worked with thousands of clients over his 15-year career. He is active in the media and is a personal finance columnist for the Financial Post and MoneySense.
He has a particular interest in working with clients with complex planning issues, including Canadian expats in other countries.
Jason is a Certified Financial Planner (CFP).
Nancy, Brenda and I will be contributing monthly to Retire Happy. We will aim to educate you on a wide variety of financial topics. Our primary goal is financial objectivity because we have no axe to grind. If you would like us to write about any specific topics, please feel free to reach out to us.
We look forward to helping you to Retire Happy!