Consumers More Confused Than Ever About Financial Planning
March 27, 2002, Toronto
- Caught in the market collapse of the past year, more and more Canadians have been turning to financial planners for guidance. But a recent survey by Financial Planners Standards Council (FPSC) shows that they're still confused about what financial planning is and how to go about it.
"The survey results are a clear indication that even Canadians who know enough to seek the advice of financial professionals need more information about the financial planning process and how it can help them attain their goals," says FPSC President Don Johnston.
"Selecting the right financial planner can be as important as selecting the right doctor. Obviously, not all Canadians understand this yet," he says. "This kind of research helps us to better educate Canadians about financial planning and how to make prudent choices when seeking professional advice. The more they know, the more discerning they can be in their choice of a financial planner."
FPSC surveyed 685 Certified Financial Planner® (CFP®) practitioners across the country about the most frequent financial planning mistakes made by their clients. The planners rated these on a scale of one to ten, with ten indicating a very high frequency and one very low. Listed below are the most common mistakes made and their frequency ratings - with the previous (1999) survey's ratings in brackets.
Neglect to evaluate their financial plan periodically
7.48 (7.19)
Confuse financial planning with investing
7.45 (7.41)
Don't set measurable financial goals
7.29 (7.25)
Think financial planning is the same as retirement planning
7.28 (6.85)
Are afraid of planning or don't plan in general
6.97 (N/A)
Expect unrealistic returns on investments
6.89 (6.54)
Don't understand that good professional planning advice is largely dependent on good information from the client
6.84 (6.15)
Don't understand how advisors are compensated
6.59 (6.34)
Have no idea what a financial planner does
6.48 (N/A)
Are looking for quick fix instead of a long-term strategy
6.45 (6.23)
Eighty-seven per cent of the survey respondents advise clients with a net worth of more than $100,000, the majority of these (67%) falling into the $100,000 to $500,000 range.
To help Canadians better understand financial planning, FPSC's website provides 'Financial Planning 101,' and explains how to find, assess and choose a financial planner.
Financial Planners Standards Council is a not-for-profit organization dedicated to protecting Canadian consumers by establishing and enforcing education and ethics standards for financial planners who hold the Certified Financial Planner designation. FPSC is the Canadian licensor of the internationally recognized CFP certification marks currently used by more than 14,000 planners in Canada, and 63,000 planners in 17 countries around the world.
CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
are certification marks