usinessman holding binoculars with tie and shirt on cityscape

Equities are expected to deliver single-digit returns over the long term but will easily surpass projections for fixed-income returns, according to the updated Projection Assumption Guidelines for financial planners published Monday by Financial Planning Standards Council (FPSC) and Institut québécois de planification financière (IQPF).

The guidelines, which take effect May 1, are designed to help financial planners make long-term financial projections (10 or more years).

Among the changes to this year’s projections, projected fixed-income returns have been reduced “to account for the appreciation in historical bond prices that cannot be explained by changes in interest rates,” FPSC and IQPF say in a news release.

The projected guidelines for Canadian equities are 6.4%, below the 6.7% returns projected for other developed market equities and the 7.4% for emerging market equities. The return projection for fixed-income is 3.9%, with short-term returns projected at 2.9%.

“The Projection Assumption Guidelines report is an important resource for financial planners who recognize the need for projections that are free of personal bias as they assist their clients in achieving their financial goals,” says Susan Howe, chairwoman of FPSC’s Standards Panel. “Accuracy and currency of the guidelines offers planners an objective resource to provide unbiased professional advice.”