The value of financial planning gets yet another stamp of approval. Investors with financial plans feel better prepared to deal with difficult economic times and better equipped to attain a wide spectrum of life goals, according to a study conducted by Financial Planning Standards Council (FPSC).
The study notes that Canadians engaged in comprehensive, integrated financial planning are significantly more optimistic about their personal wellbeing as compared to those who aren’t.
“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 manage through difficult times,” says Cary List, president and 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.”
The five-year study shows that Canadians getting limited financial advice are being left behind by those engaged in comprehensive, integrated planning.
“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,” says List. “And those who are doing no planning at all are being left far behind.”
Another finding of the study reveals that 61% of participants who received detailed and wide-ranging financial planning felt confident about their finances in retirement, significantly higher than those with no financial planning (27%), and those who engaged in limited financial planning (46%).
“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,” says List.
The study also affirms that advisors offering comprehensive financial planning have stronger, more loyal relationships with their clients. This is welcome news, given that client loyalty can be fickle (read: Investors keeping their options open).
This stronger client-advisor relationships is the result of comprehensive, integrated financial planning where planners engage their clients in a broader range of activities — tax and estate planning, insurance and risk management, debt management, etc. that go far beyond retirement and investment planning, says the study.
(06/15/10)