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The Smart Cookies

Why you need a financial planner Add to ...

In a recent BMO survey, seven-in-ten respondents admitted they do not have a financial plan in place. Many Canadians are choosing to go it alone. Not having a plan, or worse, attempting to be your own financial planner will be one of the bigger mistakes of your life, especially in times of great economic uncertainty and stress.

You should only ever subscribe to the DIY money management model if you happen to be an expert or have hours on end to stay in the know. And with more information available then ever before on managing your own money, the latter pretty much entails a full-time job.

Since the rules are always changing, even the smartest of cookies could use a little help. And, the more you have to keep track of, the more a planner becomes an essential component of making, keeping and protecting your dough.

While there are certain financial aspects you can handle on your own, some things should be left to the pros. We've used a simple test to figure out what those are. Anything that makes us feel excited or slightly nauseous, or makes our eyes glaze over in boredom - planning for the golden years, starting your own business, going to the chapel or going through a divorce, - requires a planner to advise us on what to do and how to do it right.

Are you saving enough and is it in the right place? Are you paying too much in taxes? Do you have the right insurance? Is your family protected in case something happens? These are all questions a planner will address because if key pieces of your financial puzzle are missing, you're jeopardizing yourself and those you care about.

Finance that's straightforward and requires only a bit of time on our part we can do ourselves. For example, there's no need for you to visit a financial planner to create a smart spending plan. With personal finance software at the ready and tools like that allow you to track your daily expenses and easily upload to your favourite financial software, the most basic money management has never been easier.

And after completing your spending plan, don't panic if you suddenly realize you're not rolling in it and assume you won't be able to find a good planner to take you on. Our strategy was to ask the wealthiest person we knew if his or her adviser would be willing to take us on. Financial planners generally want to keep their "A" clients happy, and we didn't mind being a favour.

If the referral route doesn't work for you, visit to search for a planner in your area. The bonus is that this site also keeps track of disciplinary problems or complaints, so feel free to get out your detectives kit and check to see if a financial adviser you're considering hiring has any marks on his or her record. Your financial planner should have impeccable credentials.

Your first meeting with your new planner should feel like a great first date. You should like each other, trust one another and look forward to seeing each other again. Your adviser's asked all the right questions - everything from your family picture and lifestyle to how much money you have to invest to your tolerance for risk to your credit score - and you, in turn, have asked about qualifications, fee structure and investment philosophy to ensure it's a good fit. Ideally the planner has worked with clients in your similar situation (single, married, divorced) so they know the issues you are facing.

How much you want to be directly involved with your financial planner depends on your money style and personality. Most experts recommend reviewing your plan every three months.

Remember: you need to take a proactive role when it comes to your money. You wouldn't wait for your aesthetician to call and tell you you're getting close to sporting one eyebrow; don't wait for your planner to call either. That being said, he or she should always let you know when there's been a major change in the market that could affect your investments or there's a new product or piece of information you could benefit from. If you don't hear from your financial adviser at those critical times - to take a page from Greg Behrendt - he (or she) is . You must move on. But move on to a better planner; don't opt to go it alone.

Good friends recently had their first financial review with a planner and, in the course of their meeting, they realized that servicing both a line of credit and mortgage meant they were paying far too much interest. By consolidating the two, they'll now pay off their mortgage seven years sooner and save over $61,000 in interest by eliminating both debts. That's 61,000 good reasons to visit a financial planner right there.

Angela Self will be writing for Globeinvestor.com weekly. She is one of the founders of the Smart Cookies, a group of five women who specialize in personal finance. They are hosts of a self-titled show on the W Network and the authors of The Smart Cookies' Guide to Making More Dough. Find out more about them at

For more, take a look at Angela's in today's Life section of the Globe and Mail.

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