Tag Archives: Financial Planning Standards Council

Have you committed financial infidelity?

My husband and I joke that it would be pretty hard for one of us to make a major purchase without the other finding out because all our accounts are online and both of us “visit” our money frequently. Also, our Capital One MasterCard has an annoying but useful safety feature that generates an email to each of us each time a charge is posted to our account.

However, an online poll conducted by Leger for Credit Canada and the Financial Planning Standards Council (FPSC) earlier this year revealed that 36 % of Canadians surveyed have lied about a financial matter to a romantic partner, and the same number of participants had been victims of financial infidelity from a current or former partner. Furthermore 34%  of those polled keep financial secrets from their current romantic partner.

Kelley Keehn, a personal finance educator and consumer advocate for the FPSC, which helped create the survey told the Toronto Star that, “Financial infidelity is generally defined as dishonesty in a relationship when it comes to money, but she noted that the term is vague and it requires you (as a couple) to define what that means.”

“If you have separate accounts in your relationship and you both discussed openly that your money is your money and their money is their money, and you’re free to do anything that you want, then spending and saving and not telling the other person wouldn’t be an infidelity,” she continued.

Other survey results reveal that:

  • Participants aged 18 to 34 were more likely to be victims of financial infidelity — at 47% — than those aged 65 and older, at 18%.
  • Gender and income do not play a significant role.
  • 35% of men surveyed and 37% of female participants said they experienced financial deception from a partner.

When asked about the worst forms of financial deception they experienced from a former or current partner, common offences cited were:

  • Running up a credit card without informing a partner.
  • Lied about income
  • Made a major purchase without telling me.
  • Went bankrupt without informing me.

Financial infidelity doesn’t get as much press as the other kind of infidelity but it can destroy your marriage. In fact, a 2014 BMO poll revealed that 68% of those surveyed say fighting over money would be their top reason for divorce, followed by infidelity (60%) and disagreements about family (36%).

Blogging on The Simple Dollar, Trent Hamm offers Ten Red Flags of Financial Infidelity and What to Do About It. He concludes:

Financial infidelity can be overcome, of course, but it requires honest effort from both members of the relationship. Accusations won’t solve the problem, nor will anger. It takes time, it takes communication, and it takes calmness. If you can’t bring those to the table yourself, you are a big part of the problem. Moving forward isn’t about winning or losing. It’s about finding a new direction that works for both of you.”

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Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

How to choose a financial planner

By Sheryl Smolkin

SHUTTERSTOCK
SHUTTERSTOCK

When I was considering retiring from my corporate job, I sought the advice of a financial planner. He gave me the confidence to pack up my downtown office and embark on a new journey.

Choosing a financial planner at the time was easy, because a retired actuary I worked with previously had attained the Certified Financial Planner designation and started his own business. One significant point in his favour was that he fully understood my entitlements under our company pension plan. I also knew and trusted him.

A financial plan is both an essential part of working towards your long-term financial objectives and a critical tool to help prepare goals for the unexpected. But if you don’t already have a relationship with a financial planner, finding one may seem like a daunting challenge, at least in part because financial planning is not regulated in most Canadian provinces. Some people who call themselves “planners” are simply licensed to sell investments.

One recognized designation is the Certified Financial Planner. CFP certification provides some assurance that the planner is committed to internationally-recognized professional standards of competence, ethics and practice as set and enforced in Canada by the Financial Planning Standards Council. CFP professionals are also subject to FPSC’s continuing education requirements and enforcement processes.

On the FPSC’s website you can search for a CFP in your area. However, choosing a financial planner involves much more than selecting a name. Finding a planner who is the right fit is extremely important because it will affect your financial future.

The FSPC offers the following 10 tips for choosing a financial planner.

  1. Be prepared. Do some independent research to maximize your familiarity with financial planning terms and strategies.
  2. Think about your financial and personal goals. Take the time to reflect on what’s most important to you for both today and tomorrow.
  3. Ask for referrals. Speak with friends and family members whom you trust; ask them if they know of or have worked with financial planners they would recommend to you.
  4. Your due diligence. Get referrals from sources you trust, but also take the time to verify the planner’s credentials by contacting his or her professional body to confirm he or she is in good standing.
  5. Interview more than one planner. Interview two or three planners, either by phone or in person, and ask them to outline their qualifications and experience.
  6. Understand fee structures. Planners are paid in a variety of ways (i.e., commission, fee-only, salary) so understand how a particular planner will be compensated.
  7. Look for competence and ethics. There are a variety of different designations in the financial services industry, and some only require day or weekend courses to earn. Ensure the planner you choose has a qualified based on a rigorous education and certification process.
  8. Get it in writing. Insist on a written letter (sometimes called an engagement letter) outlining the specific terms of the engagement and any potential conflicts of interest. The letter should also clearly disclose the planner’s method of compensation and business affiliations.
  9. Re-assess the relationship regularly. Frequent communication is imperative to a good relationship with your planner. Make sure your planner understands your needs as they change over time, and have your planner update your plan accordingly.
  10. It’s all about fit. If you don’t feel comfortable discussing personal issues with a particular planner, continue your search. Honesty, trust and communication (on both sides) are critical to the success of the planning relationship.

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If you would like to send us other money saving ideas, here are the themes for the next three weeks:

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