How to find a financial advisor to help you save for a home

So, you're on a mission to turn that homeownership dream into reality – a place to call your own. But hey, navigating the financial landscape can be a bit overwhelming, right? That's where an intelligent financial advisor steps in, like your personal GPS, to guide you toward your savings goals and get you a step closer to that front door key.

While you could try to figure it out on your own, with help from Instagram gurus and Google, the amount of information out there is overwhelming and sometimes incorrect.

The financial products, government programs, and savings strategies can get confusing, and that's where a financial advisor comes into play. Working with one is a central puzzle piece that helps you put together your financial goals, ensuring your future money matters are in check. Not only will they help you develop a methodical step-by-step plan to finance your homeownership dreams, but they also have access to the savings and investment products that will put your plan into action.

The Challenge: How do I know this advisor is “the one”?

Picking the right financial advisor is like choosing a travel buddy for your financial journey. Who you choose today could significantly impact your financial world tomorrow.

Many young Canadians aspiring to own a home don’t know where to start when it comes to finding a Financial Advisor to prepare for homeownership. Most advisors seem to be focused on retirement savings and clients in their 50s.

You are looking for a financial advisor who will help you architect tax-efficient financial strategies to navigate the labyrinth of government homebuying savings programs, execute a savings strategy, optimise your finances, and boost your credit rating. Everything needed to obtain a mortgage pre-approval and begin searching for a home.

Partnering with a seasoned financial advisor will help you to accelerate towards achieving your homeownership goals.

To help ensure you’re in good hands, we have some essential questions you might want to ask potential advisors. Don't be shy. You will be butting your hard-earned savings in their care. Any professional worth their salt will be more than happy to answer your questions.

Tips for Interviewing Financial Advisors

1. Training & Qualifications

First things first, let's get the details on their qualifications. What separates the financial wizards from the wannabes? Financial planning is like a complex recipe – it takes experience and a solid grasp of government programs, taxes, investments, retirement plans, and balancing multiple, sometimes conflicting objectives.

Believe it or not, Canada still needs to have a set rulebook for who gets to call themselves a financial advisor. So, it's up to you to make sure they've got the proper training and certifications.

Here are some common certifications: Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Registered Financial Planner (RFP), Personal Financial Planner (PFP), Chartered Investment Manager (CIM), Certified International Wealth Manager (CIWM).

Here are some questions:

• Tell me about your qualifications. Do you use what you learned in your day-to-day advisory work?

• What ongoing formal training have you taken? What have you learned on the job that they didn’t cover in certifications and training?

• How do you keep up to date on the latest market trends, innovative investment products, and changes to government programs and policies?

Appropriate certifications are the bare minimum.

2. Experience and Competence

With education and credentials, you’ve established that the advisor is book smart, so now you want to check for street smarts.

Many advisors are great talkers, but walking the talk is more challenging.

Aspiring homeowners should seek an advisor who has experience working with clients when markets are effortlessly making money for everyone and also when markets are falling.

Here are some questions to better understand their experience:

• How many years of experience do you have?

• Tell me about a client you helped save for a home purchase? What was their timeline? What did you do to understand their needs? What products and investments did you recommend in their situation?

• How do you mitigate market risks for your clients? When do you reduce risk, and when do you accept risk?

• Tell me about a time when a client asked to cash out their investments because they had lost significant value. How did you handle the situation?

• Tell me about a time when a client asked to invest more money in a stock or fund that had significantly increased in value, but would also significantly raise the risk profile of their portfolio. How did you handle that situation?

Look for advisors who've spent at least three years helping folks like you make sense of their financial needs.

3. What products and tools do you have?

Think of financial advisors as a restaurant menu. Some are generalists and offer a bit of everything, while others might specialise in specific areas like estate planning or taxes. And then, you've got those who sell financial products like mutual funds, insurance or stocks.

Some good questions:

• What financial planning tools do you use to help clients achieve their financial objectives?

• What products and financial instruments are you able to provide?

4. Approach to Advice

Does the Advisor have a systematic approach to solving financial problems? It could be as simple as:

1. Uncover needs

2. Develop a plan

3. Execute the plan

4. Monitor the performance and return to #2

5. Team Collaboration

Many advisors are members of a team. A team member might cover for them when they are on vacation or unavailable to ensure you can get answers quickly.

Ask them:

• Are you a member or leader of an advisory team?

• Who are the other team members? What are their roles?

• When can I expect to reach you? Or hear from you?

• When should I expect a team member to help me? Or hear from a team member?

6. Fee Transparency

Sure, the cost depends on what you need, but they should be able to give you a ballpark estimate. Think hourly rates, flat fees, or a cut of what you invest based on their advice.

Advisors don’t work for free, so ask how they get paid.

Making a decision

Do your best to score each category on a five-point scale, then total the scores. This scoring approach will help you decide, but ultimately, the tiebreaker is finding someone you feel you trust and can relate to your priorities.

Once you’ve chosen your finalist, ask the advisor to provide a written agreement detailing the services they will provide you. Keep this document in your files for future reference.