How to Choose a Financial Planner in Canada: The Questions That Matter

I write this from my side of the desk. I entered financial planning as an accountant, saw the industry from the outside before I joined it, and built my practice around the way I believed advice should be offered. That path gave me a bias, which I will name plainly before the end. It also gave me years of watching people choose their advisors, and a close view of the incentives that shape the advice people receive. What follows is what I have learned along the way, laid out so you can find the advisor who fits what you need.

The title financial planner itself covers at least three different businesses. One person sells investment and insurance products. Another manages portfolios. A third builds the overall strategy and works through the decisions that come with it. All three can print the same words on a business card, and in most of Canada nothing stops them. Choosing well is not a matter of comparing personalities or office lobbies. It comes down to a handful of questions, asked directly, and knowing what the answers mean. These are the questions I would ask, along with the answers behind them.

How is this financial planner paid, and what do you get for it?

There are three main models in Canada, commission-based, asset-based, and fee-only, and each one bundles a payment method with a set of services. Which of the three you are sitting across from will shape the advice you receive more than their personality, their firm, or their credentials will.

Commission-based

Commission-based advisors are paid by the company whose product you buy. The products are usually insurance, sometimes segregated funds and mutual funds, and the sale is the business. A financial plan may be offered, often free, but a free plan is a marketing document, and its job is to end at a product.

With mutual funds, the payment works like this: the fund company takes its fee out of your investment each year and sends a slice of it, often 1%, to the advisor who sold you the fund, every year, for as long as you own it. You never write a cheque and nothing shows up on a bill. Morningstar estimated in 2025 that Canadians hold roughly $1 trillion in funds sold this way and pay about $10 billion a year for the advice attached to them, without ever seeing an invoice.

Why does this matter to you? Regulators have run their own studies on commission-based funds and found the problem in the data: these products keep selling even after a track record of poor performance, because the payment to the advisor, not the results, is what drives the sale. A commission-based advisor also has no incentive to look beyond the products on their company's shelf, since nothing off the shelf pays them. Some of the most common versions have been banned outright, including funds that charged an exit penalty if you left too soon, known as deferred sales charges. The rest of the structure, though it works against the consumer's interest, remains legal and common.

Commission is the only way insurance is sold in Canada; there is no other counter to walk up to. If you need life or disability coverage, and most families and business owners do at some point, you will buy it from someone paid by the insurer. So the goal is less about avoiding commissioned advisors entirely and more about knowing when you are in a sales conversation.

Some insurance advisors do genuine planning around the products they sell, and some sell products with planning as the wrapper. The difference shows in how much of the conversation is about your situation before a product appears.

Asset-based (AUM)

Asset-based advisors, usually described as AUM for assets under management, charge a % of your portfolio each year. The service is investment management, anywhere from picking individual stocks to running portfolios of mutual funds or ETFs.

What comes with the fee varies more than most people realize. Sometimes it includes real financial planning. Sometimes it buys portfolio management and nothing more, so ask directly what is included before assuming. Many asset-based advisors can plan, and plan well. But the portfolio is what pays them and what keeps you paying them, so the portfolio gets the focus, and the planning comes second even when it was done well up front.

The advisory fees I see most often run between 1.2% and 1.5%. The number to watch is the all-in cost, meaning the advisory fee plus the fees on the products inside the portfolio. Stack a 1.2% advisory fee on funds charging another 1% and the total climbs toward 2.5% per year.

The fee is at least visible on your statement, which is an improvement over commissions. But the model creates its own pull. Paying off your mortgage, buying a rental property, gifting money to your children, or making a large donation all shrink the base the fee is calculated on, and the advice you receive on those decisions comes from someone whose income depends on the outcome. A $2,000,000 portfolio does not take four times the effort of a $500,000 one, but at 1.2% it pays four times the fee.

Investment management comes with the same reality insurance does. If you want someone else to manage your portfolio, the % model is nearly the only offer. As far as I know, flat-fee investment management barely exists in Canada outside of a robo-advisor or two, though some firms do cap the fee once a portfolio passes a certain size. So accepting the model is the price of admission, and what you can control is knowing what you are paying for, because what firms deliver for the same 1.2% ranges from a full planning relationship to a portfolio and an annual phone call.

Fee-only (fee-for-service)

Fee-only planners, sometimes called fee-for-service, charge stated dollar amounts directly, the way an accountant or a lawyer does. The model exists because of a gap the other two leave open. People needed someone to help them make decisions, the retirement, tax, estate and drawdown decisions that shape a life, and they wanted that help from someone with no stake in which way the decision went. Fee-only planning was built to fill that need.

The structure varies. Some charge by the hour, typically $250 to $500. Some set a price for a defined project such as a retirement plan; planners in Canada's advice-only community publish their fees, and most full plans land between $2,500 and $10,000 depending on complexity. Others charge an ongoing subscription or annual retainer, usually a few thousand dollars a year. Those figures can feel large next to a 1.2% that never arrives as a bill, so put them side by side: on a $2,000,000 portfolio, 1.2% is $24,000, every year. A flat fee only looks like the expensive option because it is the one you can see.

The labels take some care. Fee-based and fee-only sound identical and are not: fee-based usually means a % of assets, while fee-only means the only money the planner receives comes directly from you. And the words themselves get borrowed. None of these labels is regulated, so nothing stops an asset-based advisor from calling the practice fee-only, and I have started seeing firms advertise an advice-only plan that leads, a few meetings later, into a managed portfolio, because people who sell will always find a way to sell. Treat any label as a starting point rather than a verdict, then sit down with the person and confirm who pays them, and for what.

One structure sits in between. Some fee-only planners charge a lower flat fee and take a referral payment from the investment manager they send you to. Nothing improper happens when it is disclosed, and you get the plan and the portfolio set up in one motion, but the payment ties the planner's income to your money landing in a particular place, which leans them back toward the asset-based model. It is one more reason to ask who pays them, and for what.

Within this group sits advice-only, a community of planners committed to flat-fee financial planning with no products to sell, no assets under management, and no referral payments.

What this model sells is the planning itself, the questions that decide most of your outcome. When can I retire? How much can I spend each year without running out? Should the first withdrawals come from the RRSP, the TFSA, or the corporation? Salary or dividends? What happens to my family if I die at 55?

The standing criticism of this model is that it stops at the plan, that you walk out with a document and no one to carry it out. That was fair once, when the business began as plan-writing and little else, but the offering has matured. A fee-only planner cannot invest your money, but most will help you choose an investment manager or set the portfolio up yourself. They cannot sell you insurance, but they can define the coverage you need and book the appointment with an insurance advisor they trust. And the work continues after the plan: checking in, updating the numbers, and recommending shifts as your life changes.

So which model is best?

For financial planning, fee-only makes the strongest case on paper. The cost sits in the open where you can weigh it against what you receive, and while no model removes every conflict, because the fee itself is one, this one leaves the fewest places for a conflict to hide.

The usual defence of the first two models is that most advisors are honest people, and that is true. Juhani Linnainmaa, Brian Melzer and Alessandro Previtero studied thousands of Canadian advisors and found that most invest their own money the same way they advise: frequent trading, expensive actively managed funds, chasing last year's winners. Their personal returns trailed the market by roughly 3% per year, about the same as the people they advised.

Most of them presumably believed in what they sold, since they bought it themselves. A compensation model shapes what people come to believe, and sincere belief in an expensive strategy produces the same result as a cynical one.

The match matters more than any model in the abstract, and it starts with knowing what your situation actually is. If it is mostly a portfolio, and what you want is someone to run it well while you handle the rest, an asset-based manager may serve you well. If it is mostly decisions, when to retire, how to draw the money down, what to do with the corporation, what happens to your family, then what you need is planning, and you should look for a business built to produce it.

Does this financial planner specialize in people like you?

Two things to check here: credentials and niche.

In Canada, the Certified Financial Planner designation, granted by FP Canada, is the most recognized planning credential. In Quebec, the equivalent is the F.Pl. through the Institut quebecois de planification financiere. Both require education, examinations, experience, and ongoing ethics obligations. A designation is no guarantee of good advice, but it filters out people who never studied the work. Only a few provinces currently restrict who may use the title financial planner, so in much of the country the credential does the job the law does not.

Other designations tell you where a planner's depth runs. A CFA, Chartered Financial Analyst, points to serious training in investment analysis. A CLU, Chartered Life Underwriter, points to depth in insurance and estate work. I hold a CPA, Chartered Professional Accountant, myself, and it shapes how I approach planning, because so many of the decisions in a plan turn out to be tax decisions. None of these replaces a planning credential, but next to one they tell you what kind of problems a planner is built to solve.

Niche gets less attention and deserves more. A planner who spends most weeks on retirement income for people in their 60s will know RRIF minimums, OAS clawback thresholds, and pension splitting from repetition rather than from a textbook. One who works mainly with incorporated professionals will have seen your salary-versus-dividend question 200 times before you ask it. So ask who they usually work with and which problems cross their desk most often. If the answer sounds like your situation, that depth compounds in your favour.

What else should you look for?

A few signals from years of watching these relationships begin. Be cautious with anyone who recommends a product before asking about your life, promises a return, or presses you to decide quickly. Good advice survives a week of thinking. Be encouraged when the first meeting is mostly questions about you: what you earn, what you owe, what you want the money to do, what keeps you up at night. The plan can only be as good as the understanding underneath it.

Once a year, ask again what you paid in dollars and what you received for it. People who ask that question annually rarely overpay for long.

What questions should you ask in the first meeting?

When you sit down with an advisor, ask these questions in plain words and write down the answers.

• How are you paid, and does anyone besides me pay you?

• What will your services cost me in dollars this year?

• What exactly do I receive for that amount?

• Do you or your firm earn anything when I buy a product you recommend?

• If I paid off my mortgage or moved money out of my portfolio, would your compensation change?

• Who do you usually work with, and what problems do you solve most often?

• What credentials do you hold, and who holds you to a professional standard?

Then pay attention to the shape of the answers. A good answer arrives in dollars and in plain language. Advisors who are paid transparently tend to welcome the compensation question, because the answer works in their favour. Vague math, a pivot to how small the % sounds, or visible discomfort is also an answer, and it is one you should trust.

This reasoning is behind how I built my own practice. I charge a flat fee, sell nothing, and manage no investments, so the people I work with pay one visible amount for advice and can judge it against what they receive each year. I am not neutral on the question and would not claim to be. But the argument here does not depend on my model winning; it depends on knowing which model you are in, and choosing it on purpose rather than by default.

Where to start

You do not need to fire anyone or interview five firms this month. Start with one step. At your next meeting with any advisor, current or prospective, ask how they are paid and by whom, and ask for the answer in dollars. Every other question in this article gets easier once that one is answered, and the decision about who guides your money returns to where it belongs, with you.

Sources

Douglas Cumming, Sofia Johan and Yelin Zhang. A Dissection of Mutual Fund Fees, Flows and Performance. Research prepared for the Canadian Securities Administrators, 2015.

Morningstar. 2025 Canadian Fund Fee Study. Morningstar Manager Research, 2025.

Juhani Linnainmaa, Brian Melzer and Alessandro Previtero. The Misguided Beliefs of Financial Advisors. The Journal of Finance, 2021.

Canadian Securities Administrators. Ban on deferred sales charges and on trailing commissions paid to order-execution-only dealers, effective June 2022.