One of the most common challenges when it comes to financial planning is keeping your plan on track to achieve your short- and long-term goals. Sometimes it’s due to feeling overwhelmed, which can cause you to end up doing too little—or nothing at all.

But it needn’t be that way, according to Dilip Soman, Canada Research Chair in Behavioural Sciences and Economics Director, Behavioural Economics in Action at the University of Toronto’s Rotman School of Management.

“People tend to get overwhelmed when too many decisions are asked of them and too much information is presented all at once,” says Dilip. “You should consider asking your planner to chunk down the planning process into smaller stages, and consider outsourcing some stages, for example, using a digital questionnaire to collect data. The process should be slow enough to let you slowly wade into it, rather than be thrown in at the deep end.”

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He believes that to reach your goals, it’s important to have not just a plan, but also a plan of action.

“Behavioural economics shows that some people who intend to perform certain welfare-maximizing actions such as opening a retirement account, starting to exercise, or eating a healthier diet, fail to do so because they procrastinate and because competing demands soak up their attention. Consequently, planning alone might not be as important as collaborating to accomplish the tasks that need to be done to make the plan a success,” adds Dilip.

Certified Financial Planner® professional Delores Moskal, who serves clients throughout Saskatchewan, says understanding the factors that drive decision-making is crucial to successful financial planning.

“I try to put myself in my clients’ shoes to understand why they make certain decisions that may appear to be irrational or unwise given their circumstances,” she says. “Sometimes the decision is driven purely by emotion—including fear—such as fear of not having enough money to retire on, or fear of losing some or all of their savings if their investments fail.”

When you’re experiencing that type of emotion, Delores says, you may be in panic mode and not thinking clearly. She recommends explaining your concerns to your planner so that they can offer solutions that will help you understand your options and avoid what may be a bad decision.

“It comes down to your trust in your financial planner’s ability to find that solution,” she says.

Dilip says there’s a common behavioural disconnect in the financial planning process: even though you’re eager to reach your goals, it can be hard to motivate yourself to write a financial plan.

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“For many,” he says, “retirement is far into the future and the link between getting a financial plan made and their future wellbeing is tenuous.”

If the timing is right, however, you might find yourself more motivated to take action and put that plan in place, says Dilip. Research shows people tend to be most forward-looking at major positive life moments such as the birth of a child, marriage, a new home or a new job.

To get the most out of the financial planning experience, you need to have a trusting relationship with your financial planner. You should be as open as possible with your planner when setting your goals and don’t hesitate to voice your concerns when you perceive a threat to those goals. Remember: your financial planner is there to help you through the tough times.


To find a CFP® professional in your area who will help guide your financial future, visit FindYourPlanner.ca.

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