As we count down to the final weeks of this crazy year, one of my biggest takeaways is that the Covid-19 pandemic has proved, beyond any reasonable doubt, that Canadians need help developing financial self-efficacy.
Granted, we have come a long way since March. Governments have stepped in with support, and some of the fear and panic we all felt in the spring has eased in light of an improving economy in the second half of this year. In an encouraging sign, Canada has recovered nearly 80% of the three million jobs lost earlier this year.
While many believe the worst is behind us, and I hope they are right, I believe our biggest challenges lie ahead. For one, the rebound has been markedly uneven, and a K-shaped recovery is already showing signs of taking hold, with some industries recovering fast – and, in fact, booming – while others struggle more than ever before. This fact is palpable even in my Toronto neighbourhood, as it is in neighbourhoods across Canada. People are struggling. So, it’s little surprise that Canadians are feeling far less certain about their finances.
FP Canada recently undertook two studies on Canadians’ financial confidence, and the numbers were sobering. One study found nearly one in three Canadians feel they’ll never financially recover from the pandemic. The other study revealed nearly 40% of Canadians said they were so stretched that their bank accounts would not be able to withstand another financial emergency. This is made worse given the vigorous second wave of the pandemic we now find ourselves in, and the fresh restrictions being placed on Canadians to control the spread of the virus — restrictions that are, at the same time, choking so many people’s livelihoods.
This is a defining moment for us. What we do now will have an impact for years to come.
And this is an opportunity for the financial planning profession to step up to the challenge and lead the way toward renewal. An obvious place to start is for financial planners to engage their clients, or engage in pro-bono activities, to help Canadians see the big picture and refocus money discussions on things they have in their power to change.
Financial planners can play a key role in rebuilding Canadians’ confidence – confidence in knowing how to weather turbulent times and how to get back on track. Confidence that’s currently in short supply.
FP Canada’s studies have shown that an overwhelming majority of Canadians (71%) do not work with a financial planner. Many say they would if they had more money. Others say they don’t know where to find a financial planner they can trust, or how to get started. And others are afraid they’re going to be sold something they don’t need.
It’s time for financial planners and the broader financial services industry to dispel these concerns through their actions and change the perception that financial planning is complicated or arduous, that it’s reserved only for the wealthy, or that it’s a sales function. Financial planning is a service essential to the financial wellbeing of all Canadians. In these unprecedented times, it’s time to step up and make this message heard, with courage, strength and purpose, toward a grand renewal.