Hiring The Right Financial Advisor and Its Impact To Your Business

Many business owners would not go through the long and difficult journey of starting a business without a plan. It is very unlikely that entrepreneurs will start a potentially time-consuming and costly business venture without asking for some advice and help from professionals in the field – just like a financial consultant and accountants. It’s recommended by successful business owners that before entering the market industry, taking the right instructions and doing some research on your market is a must-do for every startup. Yet, there are still a handful of rookie entrepreneurs who neglect to consult an accountant or talk with a financial advisor when planning a startup business. Their reluctance often drives them to close their business in the long run because of poor financial management.

What’s a Financial advisor and its impact on your business?

Financial consultants, accountants, and money coaches have the ample experience and expertise needed to help business owners make the most out of their initial capital or investment in their businesses. They can assist you with the right assessment and viability of your business plan and they can greatly help in outlining strategies and timeline for your business’s path to profits.

If there is a pressure of deciding on a significant investment, such as a house, there is a distinct possibility of finding someone to provide advice about financial aspects. It is the same as getting overwhelmed with the financial details after the birth of a child, major illness, wedding,  divorce, or the death of a family member.

Financial advisors and planners help someone manage the financial life using multiple strategies and services to improve financial habits and manage their wealth.

However, not all financial advisors are the same because some specialize in types of clients, specific practice areas, and strategies and products. Some can help manage the taxes or estate planning, provide legal advice to business owners who are just starting a business, or just simply focus on retirement planning. So, there is surely an advisor who fits a specific need perfectly.

Here is a list of questions that should be asked to the right financial advisor before deciding if he or she is the perfect one to trust.

1. What financial advising services do you offer?

Licenses, credentials, and areas of expertise are all factors that determine the services that a certified financial advisor can provide. Planners cannot sell security products like stocks, or insurance without proper licenses. And they cannot provide investment advice unless registered with federal authorities or the state.

2. What experience do you have and What edge do they have from other accountants?

Just simply ask for a short description of the financial advisor’s work experience and how it is associated with their current practice. Potential financial planners must have at least three years of experience in planning.  For business owners in Toronto, we recommend a financial advisor that understands the sr&ed CRA eligibility guidelines.

What is sr&ed and why it’s important for businesses in Canada?

Earlier, we mentioned that your prospective accountant must have the right experience and eligibility for them to help you out with your business thoroughly. If you are running a business in Canada, an accountant who has eligibility on SR&ED (known as Scientific Research and Experimental Development Tax) can help you maximize your funds to expand your business since they can help out when it comes to deducting SR&ED expenditures. It’s beneficial for businesses since it reduces the tax liability of the company in the current year and carries them forward without a definite date so they can reduce their tax obligations in the next coming years. This tax incentive opportunity can help small business owners and startups use the funds to expand and grow their businesses rather than for tax obligations. A sr&ed consultant can further explain the process.

3. What type of clients do you usually handle?

Some planners choose to work with clients whose properties fall within a particular range, that is why it is necessary to ensure that the financial advisor is a perfect fit for the financial situation. We recommend that you work with locals or experts near you because there are various taxation and laws per state and per country. Work with professionals who know the in and outs of your target market, target location, and your business industry.

4. In what way will I pay for your financial advising services?

Advisors can be paid in different ways, either through commissions, fees, or a combination of both. And as part of the agreement, the financial planner should make it understandable what type of payment they would prefer for the services that they provide.

5. How much do I have to pay you for the service?

Even though the payment will depend on a particular need, the planner should be able to give you an estimation of possible costs based on the service that will be provided. The cost should include the financial advisor’s flat fees or hourly rates, or the percentage of the commission collected on products you might purchase. What we

6. Have you experienced any unethical or unlawful actions in your career?

The state insurance and securities department, the Financial Industry Regulatory Authority, and the Certified Financial Planner Board each keep records on the disciplinary history of financial advisors and planners. Professional financial planners are subject to disciplinary action if they fail to comply with the Certified Financial Planner Board standards. Make sure to hire an accountant with clean and proven track records since they are working with money, your hard-earned money – so they have to be reliable and trusted.

Final Thoughts

Finding a professional financial advisor that can help invest in a brighter future is one of the top decisions that should be considered in life. However, it is not an easy task. Before establishing a partnership with a financial planner, we need to make sure that they perfectly fit our needs. For Toronto businesses, it’s critical that you get someone who understands the sr&ed CRA eligibility guidelines.