FPSC Financial Planning Standards Council

FPSC Financial Planning Standards Council

June 16, 2010 08:30 ET

Individuals with Financial Plans Feel Better Prepared to Deal with Difficult Economic Times; Feel More Apt to Achieve Life Goals

FPSC Releases Highlights from Value of Financial Planning Study

TORONTO, ONTARIO--(Marketwire - June 16, 2010) - Canadians who have engaged in comprehensive, integrated financial planning are significantly more optimistic about their personal wellbeing as compared with those who have not. Individuals with comprehensive, integrated plans feel better prepared to deal with financial emergencies and manage through difficult economic times, and are more confident about reaching a wide spectrum of life goals. Furthermore, there is measureable proof that those who have engaged advisors for only piece-meal, "as needed" financial advice are being left behind by Canadians engaged in comprehensive, integrated planning.

These are just some of the findings of the Value of Financial Planning study, which was conducted by The Strategic Counsel and commissioned by Financial Planning Standards Council (FPSC). The first phase of this five year study was conducted during one of the most difficult economic periods in Canada's recent history (between August 7, 2009 and January 21, 2010).

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. 'Limited financial advice' was defined as engaging in just one or two of the aforementioned components.

"Never before has there been such concrete, empirical evidence confirming the value proposition of comprehensive, integrated financial planning, and its impact on people's confidence in achieving life goals and managing through difficult times," says Cary List, President & CEO of FPSC. "These results further underscore how comprehensive, integrated financial planning is salient for one's financial and emotional wellbeing - not just in the good times, but particularly through the tougher times," says List.

Highlights
Long-term Financial Wellbeing
% of people who agree with the following statements:

  Comprehensive/Integrated Limited Financial No Planning
Statement Financial Planning Advice  
% agree (n=1393) (n=2868) (n=2629)
  % % %
I feel prepared in the event of an unexpected financial emergency 54 41 22
I feel that I am prepared to manage through tough economic times 64 50 33
If anything should happen to me the people I care about would be financially looked after 72 60 38
I am on track to reach my desired lifestyle in retirement 51 33 18
I have peace of mind 61 48 36
Over the last 5 years I have improved my ability to save 57 47 37

Emotional Wellbeing:

  Comprehensive/Integrated Limited Financial No Planning
Statement Financial Planning Advice  
% agree (n=1393) (n=2868) (n=2629)
  % % %
I feel I barely get by every month 30 39 57
I don't know what to do to improve my financial situation 23 29 42
I worry a lot about my financial situation 44 49 60

Achieving Key Life Goals:
Question asked among those identifying the goal as important: And how close are you to achieving each of the goals you have identified as important? The responses below reflect respondents who answered 'close' (to varying degrees)

  Comprehensive/Integrated Limited Financial No Planning
  Planning Advice  
  (n=910) (n=1,612) (n=889)
  % % %
Making sure there is enough money to pay for post secondary education for your children 53 38 19
Helping out your children with a major purchase 44 34 15
Retiring in the lifestyle that you want to 41 27 13
Being able to take the vacation that you want every year 66 53 31
Having sufficient discretionary income to be able to lead the life that you want 55 40 21
Retiring in the lifestyle that you want to 41 27 13

"Financial planning is about putting financial strategies in place to help you manage your finances to achieve a wide spectrum of life goals in both the near- and long-term. Undertaking ad hoc, or limited financial advice, while clearly better than nothing, just doesn't have the same impact as taking a comprehensive view of how to best manage one's finances to meet your life goals. And those who are doing no planning at all are being left far behind," says List.

The research also revealed that 61 per cent of individuals who engaged in comprehensive, integrated financial planning felt confident that they will be satisfied with their financial situation in retirement, as compared with 27 per cent with no financial planning and 46 per cent who had engaged in only limited advice.

"The research proves that those engaged in comprehensive, integrated planning have a far more positive outlook regarding their financial affairs, especially with regards to their longer-term financial wellbeing," adds List.

Canadians and Their Advisors:

The results also indicated that advisors who provide comprehensive, integrated financial planning have stronger relationships, characterized by higher levels of engagement, with their clients, compared to those advisors providing limited financial advice. Advisors who provide comprehensive, integrated planning tend to have longer-standing relationships with their clients, meet more frequently, and spend more time reviewing and making changes to their plan. (Visit the News Room at www.fpsc.ca to view the separate release on advisor-client relationships).

About the Value of Financial Planning Study:

Conducted by The Strategic Counsel, the research surveyed the general English-speaking population in Canada (excluding Quebec) between August 7, 2009 and January 21, 2010. It was done through a national online panel of 7,383 respondents. The study results have been analyzed separately for varying net worth categories (i.e. <$100k; $100k-$350k; $350-$600k; $600k>) and designed to eliminate net worth as an influencing variable while evaluating the impact of financial planning.

NOTE TO EDITORS:

See additional highlights in backgrounder. As well, further details will be shared in the months ahead.

Financial Planning Standards Council is a not-for-profit organization dedicated to ensuring Canadians' financial planning needs are well served. We do this by developing, promoting and enforcing professional standards for financial planners though CFP® certification, and by raising awareness of the importance of financial planning to Canadians. FPSC has received ISO 17024 accreditation from the Standards Council of Canada (SCC) for its role as the certifying body for the CFP® certification program in Canada. FPSC licenses the CERTIFIED FINANCIAL PLANNER® marks in Canada. There are currently more than 17,500 CFP professionals in Canada and more than 126,000 individuals who have earned CFP certification in 23 countries around the world. These individuals are licensed to use the registered marks: CFP®, CERTIFIED FINANCIAL PLANNER® and CFP (with flame logo)®. See www.fpsc.ca for more information.

CFP®, CERTIFIED FINANCIAL PLANNER® and CFP (with flame logo)® are trademarks owned outside the U.S. by Financial Planning Standards Board Ltd. Financial Planning Standards Council is the marks licensing authority for the CFP Marks in Canada, through agreement with FPSB.

Contact Information

  • TO ARRANGE MEDIA INTERVIEWS OR FOR FURTHER INFORMATION,
    CONTACT: Chadnick Communications (for FPSC)
    Eileen Chadnick
    416.631.7437
    eileen@chadnick.com
    or
    FPSC
    Heather Mills
    416.593.8587 x 235
    hmills@fpsc.ca