The Value of a Financial Plan

The following is courtesy of the Financial Planning Standards Council.

Financial Planning Standards Council’s (FPSC®) purpose is to instill confidence in the financial planning profession by establishing, enforcing and promoting appropriately high standards for financial planners in Canada. We are concerned that many Canadians are not receiving the financial planning help they need. We believe that when Canadians engage in financial planning with a qualified practitioner, their emotional and financial well-being will improve.

We decided to test this theory by embarking on a three-year journey that involved the participation of almost 15,000 Canadians across the country. The three-year longitudinal study was designed to evaluate and better understand the value proposition of financial planning. To ensure statistically valid representation, our participants were from various financial brackets – not only those reporting a high net worth but also those with very moderate incomes.

We wanted to determine if there were marked differences in professed well-being between those who have a comprehensive financial plan as opposed to those who have received limited, targeted advice (such as tax planning, retirement planning, etc.) and also compared to those who have received no professional planning advice. As well, we wanted to quantify the impact of financial planning services offered by professionals who hold our Certified Financial Planner®/CFP® designation compared to non-certified financial advisors.

The following provides a summary of the findings, I’m delighted to report that three years of empirical research clearly and consistently revealed that regardless of net worth:

Those Canadians who engage in comprehensive financial planning with a CFP professional confirm significantly higher levels of financial and emotional well-being.

The study is available here.

We are grateful to our partners, the FPSC Foundation who provided financial support to this important undertaking and to The Strategic Counsel who conducted the research study on our behalf. It is my sincere desire that the findings from this report effectively encourage more Canadians to engage in financial planning, increasing their emotional and financial well-being. I would urge Canadians from all socioeconomic backgrounds to seek out a CFP professional who can assist them in identifying and realizing their goals.

Cary List
President & CEO
Financial Planning Standards Council