Tue, Dec 13, 2022 5:00 PM GMT
Canadians are worried about money. This is a reality that’s become clear from research over the years, including FP Canada’s Financial Stress Index. This year, 38 per cent of Canadians reported money as the biggest source of stress in their life – taking the top spot for the fifth year running.
Clearly, financial stress isn’t a unique issue, and many Canadians are experiencing it even more than usual given the impact of rising prices, increased interest rates and the overall volatility of the markets.
In fact, The Quiet Spend, a survey by FP Canada in October, revealed some of the challenges Canadians are facing in the current economic environment. More than half (54 per cent) of Canadians reported that they are struggling with the cost of food and/or groceries. In addition, 41 per cent are struggling with transportation costs, and 35 per cent are struggling to pay household bills, such as utilities, internet and phone bills.
The fact that such a large proportion of Canadians are having trouble affording these kinds of basic day-to-day necessities is alarming. It demonstrates that the well-being of Canadians is at risk, and action is needed to help more people become more financially resilient.
This week is Financial Planning Week – the ideal time to raise awareness of the important role that financial planning can play in the well-being of Canadians. Every day, Certified Financial Planner professionals and Qualified Associate Financial Planner professionals work with clients to gain a comprehensive understanding of their current financial picture, identify their goals and aspirations, and develop personalized plans to help people achieve these goals.
By working with a CFP professional or QAFP professional to create a plan that considers their unique circumstances, Canadians can weather the current economic storm and develop the resilience they need to thrive in the future.
— Tashia Batstone, President and CEO, FP Canada
Research clearly demonstrates the benefits of working with a professional financial planner when it comes to financial well-being. The data doesn’t lie – Canadians who work with CFP professionals or QAFP professionals were less than half as likely to say money was the top source of stress in their life compared to those who don’t work with a planner, according to FP Canada’s 2022 Financial Stress Index. And The Quiet Spend survey showed that Canadians who work with a financial planner were far more likely to say they are comfortable with their current financial situation (69 per cent) compared to those who do not use any financial planning assistance (38 per cent).
Unfortunately, not all Canadians are accessing this kind of advice. At FP Canada, we’re working hard to change that.
IMAGINE 2030 is our vision of a future in which all Canadians have the financial confidence and well-being they need, and all Canadians have access to professional financial planning that supports their diverse needs.
As a first step towards achieving this vision, it’s critical to understand the barriers preventing some Canadians from accessing advice. To do this, FP Canada undertook research that formed the basis for the IMAGINE 2030 Benchmark Report, released in May 2022. The report paints a picture of how Canadians feel when it comes to their financial well-being, financial confidence, access to professional financial advice and trust in financial professionals. And it shows there is work to do in all these areas.
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When it comes to access to advice, a clear barrier is confusion around how to go about getting advice. Of 4,000 Canadians surveyed, only 62 per cent said they know where to go if they need financial advice, and less than half said they know what questions to ask when working with a financial professional. This tells us we need to prioritize ensuring all Canadians have the financial literacy, confidence and trust to feel comfortable seeking out financial advice.
Another concerning finding from the research was the fact that certain demographic groups are scoring notably lower when it comes to financial well-being and access to financial services. For example, Indigenous peoples, the 2SLGBTQI community, women and people living with disabilities all under-index on these measures of financial wellness.
There is no one solution that will address these challenges and help all Canadians become more financially resilient. It will require investments from government, financial institutions, educators, regulators, charities and professional organizations including FP Canada. As part of our commitment to our IMAGINE 2030 vision of financial wellness for all Canadians, FP Canada is investing in financial literacy and pro-bono initiatives that leverage the skills of CFP professionals and QAFP professionals. In addition, we are exploring how technology can be utilized to increase access to financial advice, and we are looking at ways to enhance diversity among professional financial planners so they are more representative of the Canadian population.
Given the unprecedented challenges we’re all facing, more than ever, Canadians need help. For many, it can feel overwhelming, but it doesn’t have to be. By working with a CFP professional or QAFP professional to create a plan that considers their unique circumstances, Canadians can weather the current economic storm and develop the resilience they need to thrive in the future.
If nothing else, the past few years have taught us the importance of being prepared for the unexpected. To build the financial resiliency that Canadians need, we must focus on enhancing our collective financial literacy and ensuring financial planning is accessible to all communities across the country, so that Canadians can build the financial plans they need to achieve financial wellness.
Contact us at Crossgrove & Company to speak with one of our professionals today!
Reference: Globe and Mail
