Planning for a successful financial future, whatever that looks like for you, requires a comprehensive view.
If you think a Qualified Associate Financial Planner™ professional or Certified Financial Planner® professional only handles your RRSPs and taxes, or that financial planning is the same as investment planning, you’re only seeing part of a much bigger picture. In fact, you may be missing out on many of the benefits that the financial planning process has to offer.
Financial planning takes your lifestyle, financial needs, and priorities into account. Looking at just one area when assessing your finances is like trying to see out a window with the curtains half closed. You need the full view to understand your financial circumstances and make the right decisions about every aspect of your finances.
A complete financial plan covers every area of your financial life, from investments and real estate to insurance and retirement planning. There are a number of financial planning areas that a financial plan may take into account:
Financial Management: Your current and projected future financial position, including cash flow (the balance of what you’re earning, spending and saving), budget and net worth
Insurance and Risk Management: Strategies to minimize your exposure to unexpected financial loss due to death, health issues, property damage, business and other risks
Investment Planning: Managing your investments based on past experience, attitudes, objectives, time horizon, risk tolerance and need for income
Retirement Planning: A plan for your post-employment financial well-being, comparing your desired retirement lifestyle with retirement assets, planned savings, expected sources of income and return on investment
Tax Planning: Your current and future tax obligations and strategies to minimize or defer taxation on personal and/or business income
Estate Planning and Legal Aspects: Estate planning includes arranging for payment of expenses and obligations after your death, as well as the transfer of your wealth and other assets to successors as specified in and outside of your will. Legal aspects cover your legal rights and obligations, including spousal and child support obligations or entitlements; third party obligations; shareholder, partner or trust agreements; and powers of attorney or mandates.
A financial planner will take your full financial picture into account when helping you build a financial plan. They’ll also help you understand how a decision about one aspect of your finances may affect other key areas. For instance, an investment decision could have tax consequences that are harmful to your estate plan, or a choice about saving for a child's education may affect when and how you meet your retirement goals.
Your financial planner can take many seemingly conflicting priorities into account and help guide you toward the right decisions. The choices you make today matter. They could help you reach your financial and life goals, both now and in the future.
To find a CFP® professional or QAFP® professional in your area, use our Find Your Planner tool.