Presentation to: 2014 National Conference on Financial Literacy. A Roadmap to Well-Being: The Importance of Financial Planning to Society

Transcription

1 Presentation to: 2014 National Conference on Financial Literacy A Roadmap to Well-Being: The Importance of Financial Planning to Society October 2014

2 Agenda 1 Who FPSC is 2 The need for planning 3 Highlights of two studies 4 The need for change

3 Who we are.

4 Our mandate To instill confidence in the profession by: defining financial planning developing and enforcing standards certifying professionals promoting FPSC and the CFP designation as synonymous with the financial planning profession

5 . At Issue: Canadians are not getting the financial planning help they need

6 January 2008 Study: Value of Financial Planning Services Commissioned prior to financial meltdown of Purpose: Examine attitudes toward the value of financial planner services. National online survey of adult Canadians (excluding Quebec) with household incomes of $80,000 or more. 20

7 There was a high awareness of the services provided by financial planners. Advice on the types of investments that would be most suitable given your situation Help with planning financially for retirement 89 Making and/or managing investments on your behalf 79 Help to better understand and deal with any financial risks you are facing 78 89% Help with planning financially for major life events or goals 75 Advice on how to better manage personal and family finances 71 Advice on tax planning in order to ensure you are not paying more taxes than you should Help with estate planning 68 Help with estate planning 65

8 Canadians were seeking financial planners however for single issue advice RRSP, investment and retirement advice/planning dominated their scope rather than financial planning. RRSP investments/planning/advice 33 Investment planning/advice 30 Retirement planning/advice 20 RESP planning 11 Advice/recommendations (general) 9 Mutual funds/advice 8 Financial planning/creating a financial plan 8 Tax advice/planning 8 Insurance advice (general) 6 Savings plan advice 6

9 The primary reason for never using a financial planner is lack of perceived need. TOTAL LACK OF NEED 61 Do not need/not necessary 25 Can do it myself/do it on my own 12 Don t have the money/don t have a large portfolio 11 I am knowledgeable/educated in it 9 I am a planner 2 Have family member/friend who can do it 2 TOTAL NOT A PRIORITY 8 Never got around to it/don t have the time 6 Not interested/can t be bothered 2 TOTAL LACK OF TRUST 7 Don t know who to trust/not comfortable with them 5 Crooks/heard bad things 2 TOTAL COST (Cost/don t want to pay fees/not worth it) 7 Don t know where to start/don t know how to find one 2 Other 10 No answer 4

10 Fast Forward Post Melt Down

11 11

12 A Longitudinal Study on the Value of Financial Planning 3 years 1 st of its kind in Canada 15,000 Canadians 20

13 A Longitudinal Study on the Value of Financial Planning Conducted among English population in Canada Participants covered all adult age groups Results consistent across all demographic and socioeconomic levels 20

14 Study Objectives Measure the impact of financial planning in three distinct ways: emotional; tangible; & quantifiable Quantify the impact of financial planning services offered by CFP professionals compared to noncertified advisors Determine differences in impact of comprehensive planning compared to targeted specific advice 21

15 Three Categories CP LP NP Comprehensive Planning Limited Planning No Planning 21

16 Study highlights.

17 Overarching Measures Those who are undertaking financial planning believe they are Comprehensive Planning doing significantly better than those who have had no planning. LP Emotional Limited Well-being Planning 62% Better NP Financial Well-being No Planning 85% Better Overall Contentment 45% Better 21

18 On Track With Financial Affairs and Retirement 81% 44% 66% LP 52% 65% NP Comprehensive Planning Limited Planning 30% No Planning CP NP On the "right" track" Outlook for their future financial well-being Confidence about financial wellbeing upon retirement 21

19 Planning Makes a Difference Canadians Report With a Comprehensive Plan No Plan Feel on track to retire when they want to. 50% 22% Prepared for unexpected financial emergencies. 60% 28% Have enough money to live the life they want. 61% 31%

20 On average, those who have undertaken financial planning will have 5 income Comprehensive sources upon retirement Planning compared to 2 for those who have done no planning. LP Limited Planning NP No Planning 21

21 Comprehensive v. Limited Planning Results < Worry about money LP > Peace of Comprehensive mind Limited Planning Planning > Net worth 13% 17% NP No Planning 19% > Ability to deal with economic downturn 31% 21

22 This is all well and good but 22

23 People are consistently not acting in their own best interest and advisors and planners don t have all the tools to fix that. We need to change the conversation. 23