FOR IMMEDIATE RELEASE
CANADIANS LINK FINANCIAL PLANNING TO WELL-BEING
BUT STILL TOO FEW DO IT AND TOO MANY UNCLEAR ON WHAT'S INVOLVED
Toronto, September 9, 2003 — Canadians know financial planning is good for them but too few actually do it and too many are unclear about what is really involved. According to the most recent Financial Planners Standards Council (FPSC) consumer survey released today, 75 per cent of Canadian adults said good financial planning is very important to their future well-being. Nearly the same proportion (73%) said having a financial plan is important. But when asked if they have a written financial plan, only about a third said they do - fewer (27%) when you exclude those who wrote their plans themselves.
FPSC commissioned Lynn Gordon Research, Toronto, to conduct the comprehensive Financial Planning consumer survey this spring as a followup to its 1999 consumer survey. The results revealed several positive trends while also pointing to some significant challenges and opportunities facing the financial planning industry.
"The needle is moving in the right direction but we still have a long way to go in educating the public about financial planning," says FPSC VP Communications & Corporate Relations Ann Bowman. "While Canadians may not fully understand the details and comprehensive nature of financial planning, one thing is clear: they recognize the importance of planning, they value advice from financial planning professionals and they are slowly starting to associate more of their life issues and goals with financial planning," adds Bowman.
"Our mandate and the task at hand for the entire financial planning community is to continually raise the bar on standards while also educating the public on the benefits and distinctions of financial planning. The new Financial Planning Practice Standards, which are being introduced this fall, will substantially move us in that very direction."
HIGHLIGHTS: (Further survey details are posted on the FPSC website.
- 53 per cent of all respondents said they have at some point used a financial professional to help them manage and structure their financial affairs, while 39 per cent currently use one.
- 16 per cent of those who don't currently use a financial professional for these purposes said they are thinking of hiring one within the next year. This number jumps to 21 per cent for respondents under age 40, pointing to young adults as a potential emerging market for financial planners.
- The proportion of young adults (18-29) who use financial professionals to manage and structure their financial affairs doubled from 1999 to 2003 (from 8% to 16%). And among this age group, the proportion of those who have a written financial plan nearly tripled (from 10% to 29%).
Canadians Value Advice and Service over Performance:
- Respondents indicated high satisfaction with their financial professionals. Seventy-nine per cent (of those who use one) rated their satisfaction within a 7-10 range (out of 10). This proportion jumped to 87 per cent among those who have a written plan.
- Why do they stay or continue using the services of their current financial professional? Service and advice far outweigh performance issues.
- 55 per cent cited service (e.g. doing a good job, meets my needs, etc)
- 30 per cent cited knowledge and advice
- 13 per cent cited loyalty as the reason for staying
- 11 per cent cited performance
Confusing financial planning with retirement and investing - but starting to see the bigger picture:
Canadians still tend to associate the term financial planning with retirement planning and savings/investing - both important elements of a financial plan, but not reflective of the whole picture.
- 47 per cent and 30 per cent of respondents linked financial planning to retirement and savings/investing respectively.
- Additional associations were cited - but in more modest proportions - e.g. 13 per cent cited "ensuring financial security'; 11 per cent cited budgeting; 7 per cent cited lifestyle planning and education (self or children). Other elements were cited by less than 5 per cent.
- Respondents (on an aided basis) did acknowledge a wider range of areas that should also be included in a plan over those cited in 1999. These areas included: estate planning (82%), tax planning (78% compared with 61% in 1999), mortgage consideration (77% compared with 69% in 1999), setting goals with timelines (81%), budgeting (86%), insurance (77%) - and others.
- When in life would a financial plan be needed? Frequent mentions included: having children (14%); changing marital status (13%); retiring (19%); entering workforce or graduating (14%); and buying or selling a home (8%).
Optimism about Financial Future:
- 74 per cent of respondents said they are optimistic about their financial future. This proportion increases to 79 per cent among those with a financial plan.
- Men are more optimistic than women (78% for men; 71% for women).
- When it comes to making financial planning decisions, 89 per cent said they are confident (40% said very). Respondents are less confident about their investment decision, with only 64 per cent confident (and only 16% very confident).
"It is interesting that at a time of much regulatory concern about the possible waning of consumer trust and confidence in financial advisors, we are finding that Canadians who seek more comprehensive advice, advice that moves towards financial planning, both trust and are satisfied with their financial professionals," says Bowman.
The survey was conducted by telephone from April 29 to May 14, 2003, with a representative sample of 750 English Canadians, 18 to 75 years of age. The margin of error at the 95 per cent level of confidence is + 3.5 per cent.
Financial Planners Standards Council is a not-for-profit organization dedicated to benefiting Canadians and the financial planning profession by establishing and enforcing education, examination, experience and ethics requirements for individuals who choose to earn the CFP designation. There are currently more than 15,000 planners licensed to use the CFP marks in Canada, and approximately 74, 000 CFP professionals in 17 countries around the world. See www.cfp-ca.org for further information.
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See our media kit online to learn more about financial planning the CFP deisgnation in Canada:www.cfp-ca.org/media/media_mediakit.asp.
FOR MORE INFORMATION OR TO ARRANGE AN INTERVIEW, CONTACT:
Eileen Chadnick/Chadnick Communications for FPSC at 416.631.7437 or eileen@chadnick.com or Ann Bowman at 416-593-8587 ext. 225 or abowman@cfp-ca.org.
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