Are You Making This Huge Money Mistake? The Lonely Path Canadians Are Taking in Financial Planning
More Canadians are Navigating the Financial Waters Solo, according to a recent CIBC and FP Canada Poll
In the vast sea of personal finance, an alarming trend is emerging: a growing number of Canadians are navigating the waters of financial planning alone. The recently conducted financial advice poll by CIBC and FP Canada? has shed some light on some startling revelations, indicating that only a mere 25% of Canadians are currently working with an investment advisor portfolio manager. Even more concerning is the fact that 30% of respondents openly admitted to not having any formalized financial plan in place.
Numerous studies shown below have consistently shown that individuals who work with investment advisors and portfolio managers tend to be happier and generally retire with a higher net worth. (Sources at end of Article) The collaborative effort between clients and financial professionals not only guides them through the intricacies of financial planning but also helps contribute significantly to their overall well-being and financial success.
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As an Investment Advisor Portfolio Manager, reading through these survey results only intensifies my passion for trying to get the message out there, and help Canadians secure their financial futures. The statistics uncover a considerable gap in financial planning, particularly among younger Canadians who express a desire for financial plans but face perceived obstacles in implementing them. This underscores the need for heightened awareness and engagement in personal financial management.
Here Are The Numbers:
In a recent financial advice poll conducted by CIBC and FP Canada?, it was shockingly revealed that a significant portion of Canadians lack a formalized financial plan. Specifically, the survey found that only 25% of Canadians are currently engaged with a financial advisor. Alarmingly, 30% of respondents admitted to not having any financial plan in place.
Among age groups, individuals under 35 years old were most likely to express a desire for a financial plan (25%), despite not having one, in contrast to only 12% of older Canadians. Furthermore, the survey disclosed that merely 46% of respondents had updated their financial plans within the past year.
These findings underscore a noteworthy gap in financial planning among Canadians, emphasizing the need for increased awareness and engagement in personal financial management.
Furthermore, the survey highlighted that approximately half of the respondents (46%) expressed an interest in seeking retirement advice from a financial professional. However, the data revealed a notable discrepancy, as only 30% of Canadians have actively collaborated with a professional to create a financial plan, 29% for an investment plan, and 28% for a retirement plan.
This discrepancy suggests a gap between the expressed interest in seeking professional financial advice, particularly for retirement, and the actual engagement with financial professionals in crafting comprehensive plans. The findings underscore an opportunity for financial professionals to bridge this divide and offer valuable guidance to a larger segment of the Canadian population.
An Inexpensive Tool to Become Financially Free
Financial planning emerges as a crucial tool in bridging the socioeconomic gap, fostering equality between those with abundant resources and those facing financial constraints. This strategic approach serves as a guiding force for individuals of varying economic standings, providing a roadmap for budgeting, savings, and investments.
For those navigating limited financial means, a well-structured plan becomes a catalyst for wealth-building over time. Simultaneously, individuals already in a financially stable position can employ a plan to preserve and expand their assets. In essence, financial planning can act as a bridge between financial abundance and scarcity, helping contribute to the creation of a more inclusive and equitable society.
But What Is A FINANCIAL PLAN?
According to the poll, Canadians hold varying views on what constitutes a financial plan. Slightly more than half (54%) define it as a plan that outlines both long- and short-term investment products. Additionally, a significant number (51%) view it as a detailed plan encompassing their financial situation, goals, and the strategies needed to achieve those goals.
This diversity in perspectives highlights the need for clear communication and understanding when it comes to financial planning, as people may have different expectations and interpretations of what a comprehensive financial plan entails.
A substantial portion of Canadians (46%) express interest in seeking advice related to retirement. However, one-third of them identify cost as the primary barrier preventing them from accessing such advice.
Let’s Address that Cost Thing Now…
Many people think hiring an investment advisor portfolio manager is costly, but the actual cost is often not as high as it seems. There are many different fee structures to consider. Some advisors charge a straightforward fee for their services, while others use a combination of fees and commissions.
It’s essential to explore these options, understand the fees involved, and recognize that the benefits of having a financial advisor can and generally do outweigh the costs of NOT hiring one in the long run. So, the perception that hiring an advisor is too pricey is not likely to be accurate, and it’s worth checking out different options to find what works best for your financial goals.
Notably, individuals under 35 are more likely than their older counterparts to cite cost as the major obstacle. This insight underscores the significance of addressing cost concerns and making retirement advice more accessible, particularly for younger Canadians who may face additional financial constraints. Finding solutions to mitigate these perceived cost barriers could play a crucial role in ensuring that a broader spectrum of the population receives valuable guidance on retirement planning.
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In the End…
Partnering with an investment advisor portfolio manager is a crucial step for Canadians aiming to attain financial well-being and resilience. The expertise and guidance offered by an investment advisor portfolio manager can play a pivotal role in navigating the complexities of personal finance, helping to ensure effective strategies for budgeting, saving, and investing. This partnership helps empower individuals to make informed decisions that align with their financial goals, contributing to a more secure and resilient financial future. Whether it’s planning for major life events, managing debt, or preparing for retirement, the support of an investment advisor portfolio manager can make a significant difference in achieving and sustaining financial well-being.
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Joe A. Macek, FMA, CIM, DMS, FCSI
Investment Advisor, Portfolio Manager
iA Private Wealth | iA Private Wealth USA
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Studies:
92% Of Americans Say Nothing Makes Them Happier Or More Confident Than When Their Finances Are In Order - Jul 22, 2019 (northwesternmutual.com)
Poll:
Most Canadians are going it alone when it comes to financial planning: CIBC and FP Canada? Poll (newswire.ca)
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