Living your best life: The value of financial planning in 2023

Financial stress is no joke. With inflation, interest rates, and living costs going up, it's no wonder so many people are feeling extra anxious about their finances. But despite their lingering worries, getting help from a financial planner is not always something people are thinking about.?

However, a little planning can go a long way. New research from the Financial Planning Standards Board Ltd. (FPSB) shows that having a professional financial planner, like a CERTIFIED FINANCIAL PLANNER professional, in your corner can make all the difference - with your finances and much, much more.?

Let’s start with finances.?

Better off financially?

The FPSB Value of Financial Planning Research 2023, based on a global study of more than 15,000 consumers, shows that working with a professional financial planner can help significantly improve how you feel about your financial situation — both today and in the grand scheme of things.?

According to the research, people who work with a CFP professional tend to be a lot happier with their financial situation in various ways than those who go at it alone, with 3 in 5 (63%) of CFP professional clients being very satisfied with their wealth (vs. 41% unadvised consumers). They also feel more financially secure (87% vs. 74%), have more confidence in their day-to-day cash flow and spending (70% vs. 48%), and follow through with financial plans (87% vs. 72%).

Likewise, people who seek advice from CFP professionals also have more confidence in their ability to assess investment risks (82% vs. 64%)?and achieve their financial goals down the road (87% vs. 64%).

But feeling financially confident is not just a feel-good factor, it’s also a powerful positive behavioural reinforcement that can guide you towards your version of success. When you feel empowered about your finances, you can make daily decisions to help meet your big-ticket goals.?

And here’s the thing: the higher levels of financial satisfaction and confidence felt by consumers who work with a financial planner hold true for people across all age, wealth, and gender groups, according to the study.?

So, whether you're a young professional rising in your career, a seasoned veteran planning your retirement, or anything in between, financial planning is good for everyone.?

Worth more than it costs

Contrary to the myths?floating around, you don’t need to break the bank to be financially better off. According to the FPSB Value of Financial Planning Research 2023, nearly 9 out of 10 (88%) clients of CFP professionals feel that financial planning is worth more than it costs, and a similar proportion (86%) said their financial planner has made them better off financially. So, there’s a good chance you’ll feel the same!??

And if your worries about seeking a financial planner stem from stories about advisers putting their own interests above those of their clients, get this — almost all clients who work with CFP professionals (98%) trust them to act in the client’s best interests, rather than peddle products. Nearly as many (92%) plan to continue working with their current financial planner.?

?So, if you’re feeling uneasy about sharing sensitive financial information or finding a trustworthy financial planner, look for a CFP professional who has made a commitment to putting their clients first. Word of mouth is king, so feel free to ask for referrals. And don’t be afraid to pose the tough questions. Ultimately, you need the right partner to help you make the best of your hard-earned money.?

A richer quality of life?

Those who work with a CFP professional also report that they feel better about the quality of their life, beyond just finances — think improved family life (51%), a more fulfilling career (40%), and even better physical (38%) and mental well-being (51%).

In fact, people working with CFP professionals experience the highest quality of life, scoring 73 out of 100, compared to people who are unadvised (66/100) or those seeing other financial professionals (69/100).?

The study found that people who have received professional financial planning advice also report more positively about other areas of their life, like health, capability, connection, purpose, and life satisfaction. It's all about taking control of your trajectory and pursuing what matters to you.?

Additionally, more people who use a CFP professional to help them with their financial health, report feeling generally better about many other aspects of their life as well. They feel they have plenty of energy compared to the unadvised (70% vs. 56%), a close-knit circle of friends they regularly see (69% vs. 51%), and they tend to have more confidence in their ability to conquer life’s challenges (73% vs. 60%). Plus, they feel more positive and?optimistic about their lives (77% vs. 66%).?

Gen Y get the value, but have different needs?

We’re seeing the rapid growth of a younger generation of financial planning clients: Gen Ys. These are established earners approaching their 40s who want to get the most out of their daily lives. For them, a successful life isn't just about money. It's about staying mentally and physically fit while juggling family and social lives, and finding satisfaction at work.?

Immediate financial goals matter the most for Gen Ys when it comes to services they are most likely to seek — like raising a family, reducing money stress, living their desired lifestyle, and getting their foot in the property market. Over half of them (52%) also have received or expect to receive a significant inheritance or financial support, with 2 in 5 (38%) of those likely to do so in the next 5 years.?

According to the FPSB Value of Financial Planning Research 2023, Gen Ys show strong intention to obtain financial planning services, sooner rather than later. And two of three (67%) who don't currently work with a financial planner are considering paying for one in the near future, with the majority (85%) set to do so in the next decade.

With the world at their fingertips, Gen Ys are not afraid to take charge of their own finances either, through apps that help them with spending and budgeting (41%), investing directly through fintech platforms (37%)?and keeping up with emerging trends like crypto assets (30% currently invest in digital assets like crypto). Plus, most (81%) are all about investing for a purpose beyond profit.?

In addition, digital experiences are a priority for this generation of consumers, with 24% of Gen Ys who received or expect to receive their significant inheritance or financial support reporting web searches are likely to inform or support their decisions on how to manage these.

Ultimately, it's the holistic value of working with a financial planner, like a CFP professional, that really seals the deal for Gen Y — with 85% of those who work with a financial planner agreeing their planner has helped them feel more in control of their destiny and ability to live life on their terms.