A week to celebrate

It’s finally here – the week that you wait for all year. Financial Planning Week 2020!

OK, so maybe some of you aren’t as excited as I am, but it is important and if you can bear with me for a few minutes, I can tell you why. 

Today marks the first day of the 12th annual Financial Planning Week (FPW) across Canada. FPW is an integral part of national Financial Literacy Month and has a couple of key objectives:

• Raise awareness of the importance of financial planning and issue a call to action.
• Encourage the financial services industry to promote the value of financial planning to their clients.
• Provide a platform for financial planning professionals to discuss the evolution of the profession.    
• Encourage consumers to take positive planning action.
• Promote the value and benefits of working with a CFP or QAFP certificant.

Why do I say that this is so important? Put simply, most Canadians’ personal finances are a mess. We have the highest consumer debt load of any developed nation and many of our citizens are on the brink of insolvency.

Many do reach out for guidance, expecting to get quality planning advice but instead talk to an investment advisor who simply tries to sell them on their ability to manage investments better than others.

But people need to realize that a slightly better rate of return or cutting a little off the management fees will not fix your financial situation as it doesn’t address debt, cash flow, risk management, retirement planning, taxes, income protection, etc. 

What is a real financial plan? It is not a quarterly statement that shows how your investment portfolio is performing nor is it a one-page document with some basic plans for how to draw out your retirement income.

A real financial plan is a living document that shows where you are today, where you’d like to be in the future and details exactly how you will get there.

In addition, a living plan is one that is regularly updated to account for all of the changes that occur in the markets and your own life.

Repeated research studies have shown that Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being.

They are more confident in their ability to handle the inevitable bumps in life and are better equipped to achieving their goals. Most importantly, they report lower overall stress.

The results from one of these recent of these studies serve as a firm reminder of the importance of getting professional help:

• 79% of Canadians don’t have strong confidence that they will achieve their financial life goals.
• Only 18% strongly agree that they are knowledgeable about financial matters.
• A mere 20% strongly agree that they’re successful in sticking to the financial strategies they do have in place.
• 68% of Canadians say that they worry a lot about their financial situation.

Most Canadians don’t have a comprehensive financial plan, and this is creating considerable (unnecessary) stress on many people. Whether you are in your early 20s or already retired, a sound financial plan can significantly improve your well being and your economic situation.    

Most importantly, many people say that a sound financial plan helps them get a good sleep at night.

If you haven’t done so already, consider this year’s Financial Planning Week as your “call to action”. Make a plan to sit down with a Certified Financial Planner professional this week and get your own financial plan started!   

For more information: www.fpcanada.ca/about/financial-planning-week

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.