Financial Planning

FPSC shares research results for Financial Planning Week

By IE Staff |

A new report provides a potent argument for financial planners seeking to convince Canadians about the value of having a comprehensive financial plan.

According to a study commissioned by Financial Planning Standards Council (FPSC), the fewer than two out of ten Canadians who engage in comprehensive financial planning report significantly more proactive savings habits than those without financial plans, and in turn claim greater levels of emotional and financial wellbeing.

October 4–10 is Financial Planning Week in Canada, and FPSC is sharing findings from its Value of Financial Planning study to encourage Canadians to put more financial planning into their lives.

Conducted by The Strategic Counsel, between Aug 7, 2009 and Jan. 21, 2010, the study surveyed over 7,000 English-speaking Canadians from varying net worth categories.

The study defined ‘comprehensive, integrated financial planning’ as that in which one’s main financial advisor has provided financial planning for major life goals and events, or at least three of the following planning components: household budgeting, tax, retirement, estate planning, investing, debt or risk management.

Respondents who engage in comprehensive financial planning say they regularly put aside money for short- and longer-term needs, including retirement, education, emergency funds, debt reduction, and home ownership, as well discretionary ‘wants’ like travel and leisure.

Fifty seven per cent of respondents who engage in comprehensive planning said they have improved their ability to save over the last five years compared with only 37% who have had no financial planning.

“As Canadians’ debt levels soar, a minority is proving that financial planning can make an enormous difference in one’s life,” says Cary List, president & CEO of FPSC. “Those with comprehensive financial plans are saving more proactively for the things that matter to them, and are reporting much higher levels of confidence in dealing with life’s uncertainties and in reaching their financial and life goals.”

Savings & investment vehicles

According to the study, those with comprehensive financial plans are also more apt to invest in a wider variety of savings and investing vehicles:

> 80% have an RRSP (vs. 70% who seek only limited advice; 35% no planning);
> 43% have a Tax Free Savings Account (vs. 33% limited advice; 15% no planning);
> 26% have a Registered Retirement Income fun (vs. 16% with limited advice; 6% no planning).

Financial and emotional wellbeing

Among those who engage in comprehensive financial planning, 71% said, “I am closer to achieving some of my life goals as a result of financial planning”; 70% said, “Financial planning has helped me to have greater peace of mind”; and 59 per cent said, “Because of financial planning, I worry less about money.”

“Comprehensive planning with a professional gets people doing more of the things that are good for their financial wellbeing and ultimately their lives. It’s Financial Planning Week -- there’s no better time than now for Canadians to commit to developing a more financially secure future by bringing more financial planning into their lives,” says List.

IE