A professional financial planner can help provide insight, encouragement and peace of mind
Cary List, president and CEO of the Financial Standards Planning Council (FPSC), knows through extensive research and experience that Canadians who plan properly are more in control and less stressed about their financial futures.
This finding was quantified in a three-year longitudinal study conducted on behalf of FPSC, that involved almost 15,000 Canadians from across the country. The study clearly indicated that Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being than those who do no planning or only limited planning.
“Canadians who work with a Certified Financial Planner® professional reported higher levels of confidence in reaching their financial goals,” adds Mr. List. “People who plan are in a far better position to do the things in life that are important to them, like travelling after they retire or leaving a financial legacy for their grandchildren.”
He points out that professional financial planners are trained to understand a client’s whole financial picture, provide clarity on how each financial area in the client’s life may impact the others, and confidently guide the client to financial health.
Jocelyne Houle-LeSarge, president and CEO of the Institut québécois de planification financière (IQPF), FPSC’s counterpart in Quebec, says it’s important to help people overcome the myths associated with professional financial planning.
“One of the main reasons Canadians hesitate to meet with a financial planner is their low level of financial literacy,” she says. “Many people are not comfortable discussing their personal finances because they feel they don’t have the necessary knowledge to do so and might be embarrassed to admit it.”
“The truth is, it’s the people with the least money who could gain the most from planning properly. When you have very few dollars, where you put each of these dollars can make a huge difference,” she adds.
And it’s never too early to start planning, adds Ms. Houle-LeSarge. The earlier you engage a professional planner, the better. In fact, FPSC’s research indicates that the number one regret people have is that they did not start the process sooner.
Yorkton, Saskatchewan-based CFP® professional Delores Moskal says financial planning is life planning.
“It’s as much about the dollars and cents as it is about the things going on in your life – marriages, children, second marriages, the adjustment in life in the event of the death of a spouse. Whenever there are big changes in your life, you need to ask yourself ‘What am I missing; what don’t I understand?’ A CFP professional can help provide insight, encouragement and peace of mind,” she says.
Ms. Moskal adds that while financial planning is at the heart of the service she provides to her clients, she strives to achieve a balance between money and dreams.
“These two concepts are linked; the incentive for financial planning is the realization of your dreams and aspirations,” she says.
However, Canadians need to be careful about who they choose as their financial planner, says Mr. List.
“Unfortunately, it’s often a case of buyer beware. Outside of Quebec, there is no regulatory standard in place for those who call themselves financial planners or offer financial planning services. The term ‘financial planning’ is too often used as a sales pitch to sell product, and the title ‘financial planner’ is used haphazardly throughout the industry. In fact, in most provinces, anyone can call themselves a financial planner without being required to obtain any credentials whatsoever,” he adds.
The danger is that people could be getting advice from individuals who call themselves financial planners, but who don’t have any qualifications specific to the financial planning practice and who are not held accountable to any oversight body related to the financial planning advice they offer.
Mr. List says Certified Financial Planner professionals must meet clearly defined – and enforced – standards of competence, ethics and performance. They have had to demonstrate their financial planning competence through extensive education, a rigorous standardized national examination process, and accountability to the FPSC for a code of ethics, practice standards, and the rules and regulations of a professional body.
“Financial planning works, but you need to know that the person you are sitting across from has the required competence, skills and ethical standards to get the job done right. Canadians deserve financial planning from qualified professional financial planners – seeking out only those with the CFP designation (and F.Pl. in Quebec) offers this surety,” he says.
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