Mark Convinced His Mom To Seek Financial Advice. What Are Important Questions To Ask?

Q. I’m 35 years old and my mom is 58. I convinced her to make an appointment with a financial adviser to go over retirement options and withdrawal strategies, as she wants to retire this year. I’m going with her.

My parents are married and both are planning to take their Canada Pension Plan (CPP) at age 62. My mom would make full CPP (minus the penalty for taking it early) and my dad about one quarter. They would also be entitled to Old Age Security (OAS ) at age 65. My mom is currently working, earning $110,000 annually. My dad has sporadic employment. They own their own home and will have it paid off in a year. They also have about $250,000 in savings in exchange-traded funds (ETFs) but have no tax-free savings accounts (TFSAs) or registered retirement savings plans (RRSPs). My mother will also get an employer pension (not indexed) through work that will pay her about $25,000 annually if she retires at age 62. My dad has no employer pension. Since both my parents have had a bout of cancer, they are opting to retire earlier rather than later. What are some questions I should ask the financial adviser? —Mark in New Brunswick

FP Answers: Mark, it’s a great idea to help a loved one plan for retirement and is one of those moments that feel both personal and important. With your parents planning to retire soon and with CPP, OAS, and a modest investment portfolio in play, a good first meeting with a qualified professional can make a real difference.

Before you walk in, here’s a list of smart, practical questions to ask that will help you understand what your parents are signing up for and how it might shape their financial future.

Start with the basics. Ask the adviser about his or her credentials, education and regulatory status (designations held), length doing this work and whether she or he is registered with a securities regulator. Be sure to find out about any disciplinary action or restrictions.

In Canada, anyone can technically call themselves a “financial adviser,” but credentials, such as Certified Financial Planner (CFP), are meaningful because they reflect formal training and ethical standards.

Here are some questions you could ask:

• What professional certifications do you have — and what do they mean?
• Are you registered with provincial or national regulators?
• Have you or your firm ever had disciplinary actions?

Next, ask what they actually do for their clients. Many people think “financial adviser” means someone who just buys and sells investments. But good advisers do much more: retirement income planning, tax strategy, estate planning, budgeting for ongoing expenses and sometimes co-ordinating with accountants or lawyers.

You could ask the following:

• What services are included in your planning?
• How do you build a retirement income strategy?
• Do you co-ordinate with other professionals, such as tax experts?

Also, be direct and ask them how they get paid and what their services will cost. This is one of the most important questions you can ask, yet it’s often overlooked. Advisers may be either fee-only, commission-based or a mix of the two. Fee-only advisors are typically paid directly by you and don’t earn commissions on products, which reduces conflicts of interest. Advice-only planners are also paid directly by the client but do not sell any investment products.

It’s also important to ask for a clear breakdown of every fee: what you’ll pay for planning; for ongoing monitoring and for each investment recommended. You should know up front what the cost will be and whether there are any hidden fees buried in the investment products themselves. How is the fee calculated? Is any portion of your fees tax deductible?

Also, be clear on how the adviser will work with you and your mother. Retirement planning isn’t a one-and-done meeting. A good adviser should explain how you’ll work together over time.

Ask about:

• How often will you meet or review the plan?
• How are updates or life changes handled?
• Will follow-ups happen by phone or online?

For your situation — your parents retiring and you helping them — it’s especially valuable to understand how communication will work as needs evolve. Note that if you are not acting in a Power of Attorney role, you are not able to obtain information about your parents’ accounts without their express permission. It’s important to also ensure that the adviser specializes in retirement planning. Your parents aren’t looking for generic advice . They need expertise in retirement income strategies.

You can ask questions, including:

• When to start CPP and how early withdrawals affect benefit amounts?
• How to time OAS to maximize lifetime income?
• What are smart withdrawal strategies for after retirement?

Not all financial advisers or planners focus on retirement planning, so ask whether they regularly work with clients in this life stage and about their experience with situations similar to your parents’ — both in terms of finances and lifestyle goals.

Once you’re clear on all the above questions, ask them about their investment philosophy. This might sound technical, but it’s simple in practice. It’s about how they choose investments on your behalf. Are they more active (picking individual stocks or timing the market) or passive (using broad-based funds with low costs)? How does their approach match your parents’ risk tolerance and retirement timeline?

You don’t want to be surprised by strategy differences , especially when you have a $250,000 portfolio and retirement income to protect.

Finally, be clear on what you should bring to the meeting. While not a question for the adviser, being prepared will make the session more productive.

Bring the following:

• Recent investment statements
• A summary of expected income sources (CPP estimates, pension details)
• A list of current monthly expenses
• Last tax return

Being organized helps the adviser tailor a plan that reflects reality, not averages.

• CPP, OAS and other strategies to help seniors face a more expensive retirement
• Why retirees are often shocked by tax bills and how to reduce them

Remember, this meeting is a conversation, not a test. It’s helpful to ask these questions in writing first and get written answers that you can refer back to at a later time. Your involvement — showing up, asking questions and helping your mom think through a strategy — is valuable. For most families, retirement planning isn’t just about numbers. It’s also about peace of mind. By asking the right questions, you and your mom can make that meeting count.

Janet Gray is an advice-only Certified Financial Planner with Money Coaches Canada in Ottawa.