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The Value of Financial Planning

Individuals with Financial Plans Feel Better Prepared to Deal with Difficult Economic Times; Feel More Apt to Achieve Life Goals

FPSC Releases Highlights from Value of Financial Planning Study

Toronto, June 16, 2010 — Canadians who have engaged in comprehensive, integrated financial planning are significantly more optimistic about their personal wellbeing as compared with those who have not. Individuals with comprehensive, integrated plans feel better prepared to deal with financial emergencies and manage through difficult economic times, and are more confident about reaching a wide spectrum of life goals. Furthermore, there is measureable
proof that those who have engaged advisors for only piece-meal, “as needed” financial advice are being left behind by Canadians engaged in comprehensive, integrated planning. 

These are just some of the findings of the Value of Financial Planning study,
which was conducted by The Strategic Counsel and commissioned by Financial Planning Standards Council (FPSC). The first phase of this five year study was conducted during one of the most difficult economic periods in Canada’s recent history (between August 7, 2009 and January 21, 2010). 

The study defined ‘comprehensive, integrated financial planning’ as that in which one’s main financial advisor has provided financial planning for major life goals and events, or at least three of the following planning components: household budgeting, tax, retirement, estate planning, investing, debt or risk management. ‘Limited financial advice’ was defined as engaging in just one or two of the aforementioned components. 

“Never before has there been such concrete, empirical evidence confirming the
value proposition of comprehensive, integrated financial planning, and its impact on people’s confidence in achieving life goals and managing through difficult times,” says Cary List, President & CEO of FPSC.

“These results further underscore how comprehensive, integrated financial planning is salient for one’s financial and emotional wellbeing — not just in the good times, but particularly through the tougher times, “says List. 

“Financial planning is about putting financial strategies in place to help you manage your finances to achieve a wide spectrum of life goals in both the near- and long-term. Undertaking ad hoc, or limited financial advice, while clearly better than nothing, just doesn’t have the same impact as taking a comprehensive view of how to best manage one’s finances to meet your life goals. And those who are doing no planning at all are being left far behind,” says List. 

The research also revealed that 61 per cent of individuals who engaged in comprehensive, integrated financial planning felt confident that they will be satisfied with their financial situation in retirement, as compared with 27 per cent with no financial planning and 46 per cent who had engaged in only limited advice. 

“The research proves that those engaged in comprehensive, integrated planning
have a far more positive outlook regarding their financial affairs, especially with regards to their longer-term financial wellbeing, ” adds List. 

To see the full study and get more information please contact the FPSC

Copyright 2010 Financial Planning Standards Council. All rights reserved.

Reprinted with permission.