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A GPS for Canadians' Financial Wellbeing (FPSC Study)

Jan 22 2013 12:00AM

Marketwire

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TORONTO, ONTARIO -- (Marketwire) -- 01/22/13 -- Financial Planning Standards Council (FPSC®) has recently released this year's results of its "Value of Financial Planning" longitudinal study. For three consecutive years FPSC has conducted a comprehensive evaluation of financial planning activities undertaken by Canadians measuring the impact of financial planning on Canadian's emotional and financial wellbeing. The study sets out to discover whether financial planning really makes a meaningful difference to Canadians; whether Canadians who receive comprehensive planning are better off than those who have only engaged with one or two financial planning services; and if there are differences in Canadians perceived value of planning amongst those who engage with Certified Financial Planner®/CFP® professionals versus those who work with non-certified advisors for their financial planning needs.

A total of 8,546 Canadians participated in this year's study and were segmented into three groups:

1. Those that have comprehensive/integrated financial plans (i.e. the main financial professional has provided financial planning for major life goals and events or at least three of the planning components: household budgeting, tax, retirement, estate planning, investing, debt or risk management).2. Those with limited planning (i.e. the main advisor has provided advice or services related to one or two elements of the planning components).3. Those with no planning (this group had not used any services through an advisor).



Do people feel they are better off after they have undertaken financial planning? Absolutely! Those Canadians who have received "comprehensive/integrated" planning believe they are significantly better off than those who have had "no planning" regardless of their net worth. In fact several overarching measures revealed that Canadians with a comprehensive/integrated plan reported higher levels of wellbeing and contentment than their non-planning counterparts: Those with comprehensive plans scored 62 per cent more on emotional wellbeing than those without; 85 per cent more on financial wellbeing and 45 per cent more in overall contentment. These findings have been consistent over the three years FPSC has conducted the study. See backgrounder for more highlights and measures that contribute to wellbeing.

Does comprehensive planning make a greater difference, or is it good enough just to do something such as what limited planning would offer? Once again, the study revealed that those Canadians who have engaged in comprehensive financial planning report significantly higher levels of financial wellbeing compared to their limited planning counterparts (an 18% difference); overall contentment (a 28% difference) and peace of mind (17% difference). Equally salient - those with comprehensive plans are far more likely to report confidence that they would be able to deal with an economic downturn than those who do only limited planning (a 31% difference).

Are there differences in Canadians' perceptions of the value of their financial planning amongst those who engage Certified Financial Planner® professionals vs. those who engage non-certified advisors for their financial planning needs? The study reveals that those who work with CFP® professionals are more likely to report their financial affairs are "on track" than those dealing with "non-certified" planners (78% vs. 64% respectively). They are also significantly more likely to report having more peace of mind; worrying less about money and being closer to achieving some of their life goals as a result of planning. See backgrounder for details.

Key findings:

-- Those who received comprehensive/integrated financial planning believe they are significantly better off than those who have not engaged in any financial planning. Those doing no planning, including Canadians from all net worth levels, are being left behind in significant ways.-- Those who are just taking advantage of one or two elements of financial advice rather than a comprehensive financial planning approach are also being left behind.-- The ultimate GPS to reporting higher levels of financial and emotional well being belongs to people who are more likely to reach out to a CFP professional versus those who opt for a non-certified individual.



"Having a comprehensive financial plan with the guidance of a CFP professional can provide a road map towards greater financial and emotional wellbeing. Now with three years of empirical research reinforcing the value of planning with the right professional we urge Canadians to start the year off well by taking that step and talking to a CFP professional about their goals and financial planning needs," says Cary List, President & CEO, FPSC.

Notes to Editors:

See additional study highlights in backgrounder.

Cary List, President and CEO, FPSC is available to discuss the Value of Financial Planning study. FPSC can also connect you with CFP professionals to talk about their experiences and insights delivering financial planning services to Canadians.

About the Study: The Value of Financial Planning study is a longitudinal study that was commissioned by Financial Planning Standards Council (FPSC) in 2009 and conducted by The Strategic Counsel. The research surveys the general English-speaking population in Canada (excluding Quebec) with this year's research conducted between April 30 and August 10, 2012 through a national online panel of 8,546 respondents. The study was designed and analyzed to eliminate net worth as an influencing variable while evaluating the impact of financial planning.

About Financial Planning Standards Council

Financial Planning Standards Council (FPSC®) is a not-for-profit organization which develops, promotes and enforces professional standards in financial planning through Certified Financial Planner® certification, and raises Canadians' awareness of the importance of financial planning. FPSC's vision is to see Canadians improve their lives by engaging in financial planning. Currently, there are more than 17,500 CFP professionals in Canada and 140,000 CFP certificants in 24 countries worldwide. See www.fpsc.ca for more information.

Financial Planning Standards Council is grateful to the FPSC Foundation for sponsoring a portion of the third year Value of Financial Planning study.

HIGHLIGHTS OF THE VALUE OF FINANCIAL PLANNING STUDY

FPSC's Value of Financial Planning Study, revealed that Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional wellbeing than those who do no planning - or just limited planning. Those with comprehensive plans feel more on track with their financial goals and retirement plans; that they have improved their ability to save in the past five years -- and they are more confident that they can deal with the bumps in life. And while planning for the future is important, those with comprehensive financial plans are also able to indulge in their discretionary spending goals. Finally, Canadians who engage CFP professionals for their financial planning needs seem to be getting the extra edge in the value and benefits they experience from financial planning compared with those who engage non-certified advisors.

Note: Comprehensive Planning = CP; Limited Planning = LP; No Planning = NP

1. CP: Those that have comprehensive / integrated financial plans, (i.e. the main financial advisor has provided financial planning for major life goals and events or at least three of the planning components: household budgeting, tax, retirement, estate planning, investing, debt or risk management).2. LP: Those with limited planning, (i.e. the main advisor has provided advice or services related to one or two elements of the planning components).3. NP: Those with no planning, (this group had not used any of the financial planning services through an advisor).



Highlights:

On Track with Financial Affairs:

Those with comprehensive plans (CP) are substantively more likely to report feeling on track with their financial affairs compared with those who do no planning or only limited: 81% (CP) feel on track with their financial affairs vs. 73% (LP) and only 44% (NP).

Retirement:

Those who engage in comprehensive financial planning, and cite retirement as an important goal, feel more confident in their plans to retire: 50% (CP) feel on track to retire when they want to vs. 39% (LP) and only 22% (NP).

Ability to Save Compared to Five Years Ago:

Those who have comprehensive financial plans (CP) are significantly more likely to report that they have improved their ability to save in the last five years: 62% (CP) vs. 56 (LP) vs. only 40% (NP).

Dealing with the Bumps in Life:

Those who have comprehensive financial plans are significantly more confident that they are prepared to deal with the challenges and bumps in life such as: unexpected financial emergencies, tough economic times and ensuring loved ones are financially looked after if something should happen to them.

Can deal with unexpected financial emergencies: 60% (CP) vs. 53% (LP) vs. 28% (NP)

Can deal with tough economic times: 65% (CP) vs. 57 (LP) vs. 36% (NP)

Ensure loved ones financially looked after if something should happen to them: 73% (CP) vs. 65 (LP) vs. 41% (NP)

Living Today - Discretionary Spending:

While saving for the future is important, it's also important to consider the needs and wants of today. Those who engage in comprehensive planning feel more confident in reaching their discretionary goals that they identified as important:

74% (CP) said they would be able to take an annual vacation vs. 70 (LP) vs. 44% (NP);

61% (CP) said they'd have enough money to live the life they want vs. 55% (LP) vs. only 31% (NP).

65% (CP) said they'd have enough money for splurges vs. 58% (LP) vs. only 31% (NP);

The Difference a CFP Professional can Make:

Canadians who work with CFP professionals are more likely to report benefits of planning than those who engage non-certified advisors for their financial planning needs.

"Financial planning has helped me have greater peace of mind" (73% planner is CFP professional vs. 63% advisor non-certified)

"Because of financial planning, I worry less about money" (63% planner is CFP professional vs. 53% advisor non-certified)

"I am closer to achieving some of my life goals as a result of planning" (70% planner is CFP professional vs. 61% advisor non-certified)

"Because of financial planning, my family will be looked after if anything happens to me" (60% planner is CFP professional vs. 53% advisor non-certified)



Contacts:
To arrange interviews please contact:
Eileen Chadnick
Chadnick Communications (for FPSC)
416.631.7437
eileen@chadnick.com

Jay Cameron
FPSC
416.593.8587 x 307
jcameron@fpsc.ca





Source: Marketwire


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