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Almost two-thirds of Canadians don’t use financial planners. When asked why, the most common reason among survey respondents was that they simply felt their portfolios were too small to qualify.
The Financial Planning Standards Council released the results of their Cross County Checkup survey in early October and they showed that far too many Canadians are not accessing professional help and are falling farther behind (or not even starting) in their retirement planning process.
Sure, you can point at higher taxes, a lack of wage growth and many other reasons as your excuses for not taking control of your retirement, but the job still falls on you to take the first steps.
The survey found that 60 per cent of Canadians rarely or never maximize their RRSP contributions and a third of Canadians don’t regularly pay off their credit card balances each month.
It also showed that one-in-three rarely or never set aside any savings at the end of the month after all their expenses have been paid. This number jumps as high as 42 per cent in Atlantic Canada.
The FPSC survey showed that almost two thirds of Canadians do not have access to an employer-matching RRSP program, which means their long-term savings planning is even more critical.
When put through a “financial stress test” to see if their bank account could withstand a financial emergency, one third of Canadians failed. A similar number of Canadians admitted that they will quite likely not meet their financial life goals.
Yet, Canadians still aren’t seeking professional help to get things back on track. As stated above, almost two thirds of Canadians are not using the services of a professional financial planner.
In addition to feeling that they don’t have a large enough portfolio, a whole host of other reasons or excuses were offered.
The next most common reason was not knowing who to trust. This is certainly understandable given the confusing market place and predatory salespeople who sell products disguised as advice.
But it’s not a good enough reason to do nothing; it just means you must do your homework to find the right resources.
Interestingly enough (though not surprising), the number of respondents who were unsure of whom to trust was much lower in Quebec, the only province with legally defined job titles and title restrictions.
Only someone fully certified and properly licensed can call themselves a financial planner there, a rule not yet in force anywhere else.
Let's hope we will have this established across Canada soon.
Other common reasons for not using a certified planner professional included
- embarrassment over their financial situation
- being too overwhelmed or confused
- not knowing where to find one
- simply not knowing where to start
The FPSC’s find a planner tool is a great place to begin.
No matter what reason or excuse you might have for not getting started, I can assure you that it’s not a good one. The responsibility for taking control of your financial well being sits squarely with nobody but you.
Financial planning is not just for the wealthy and in fact, those struggling to make ends meet and save adequately are often the ones who need the most help and can benefit the most from a professional planner.
November is financial literacy month here in Canada and Nov 18-24 is the national Financial Planning Week.
This year’s awareness campaign should be your call to action to start down the path to creating your financial plan.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
