By The Globe and Mail Custom Content Studio
Cary List had no illusions of how tough the task would be when he participated in a meeting seven years ago to articulate a vision for how financial planning should evolve to meet the needs of all Canadians by 2020.
As president and CEO of the Financial Planning Standards Council (FSPC), he and the other stakeholders at the event in October 2009 knew that far too few Canadians are properly equipped to manage their finances effectively, and something needed to be done about it.
They decided on a bold vision: that, by 2020, Canada will be shaped by a nation of people, organizations and a regulatory environment that values financial planning, shares and assumes responsibility to ensure the financial planning needs of Canadians are well served, and has a viable financial planning profession that ensures broad access to competent, ethical financial planners for those who need professional advice.
A key outcome of the meeting was the establishment of Financial Planning Week (FPW) to help turn their ideals into reality. Now in its eighth year and an integral part of Financial Literacy Month, FPW is part of an ongoing effort to promote financial well-being for all Canadians.
“I have long held the view that financial literacy must be recognized as an essential life skill for all Canadians, and that it must be instilled, alongside numeracy and verbal literacy, as early as possible in life,” says Mr. List. “While we have made some progress in this area in the last several years, acceptance of the notion of financial literacy and sound financial behaviour as a life skill is still a long way off.”
He adds that many Canadians are particularly ill-prepared for retirement and uninformed about their financial situation as they approach their retirement years.
“Financial well-being is something with which all Canadians are concerned, yet most do not feel comfortable talking about it, nor do we take the necessary actions toward financial empowerment,” says Mr. List.
Jocelyne Houle-LeSarge, president and CEO of the Institut québécois de planification financière (IQPF), FPSC’s counterpart in Quebec, says many Canadians are more sensitive to their financial future than in the past, but also more aware of just how ill-prepared they are to deal with it.
“In a way that’s a good thing, because 10 years ago they were not even thinking about it or didn’t really care,” she says. “Now at least they are thinking about it and they are worried. The next step will be to take action and see a financial planner and start taking charge of their own financial future.”
Ms. Houle-LeSarge says progress towards the 2020 goals have been “baby steps,” but at least the conversation has started.
“That’s important because people generally don’t talk about their financial situation,” she adds. “Sometimes they are ashamed to be in their 50s and be so ill-prepared for retirement. We’ve tried to make them more aware of their situation and show them that there are professionals who can help them.”
Mr. List says even though there is still a long way to go to reach the level of financial literacy that Canadians need to achieve, FPW has made great strides in raising awareness of the importance and value of financial planning with a qualified professional.
“It has encouraged Canadians to take control of their futures and achieve their goals through sound financial planning,” he adds. “It has also helped ensure that Canadians have financial hiring literacy so that they’re armed with the information they need to find the right financial planner.”
But there are still gaps that need to be filled, such as the unregulated financial planning environment that leaves consumers vulnerable, says Mr. List.
“While consumers should rightfully expect that anyone presenting themselves as a financial planner is qualified, competent, ethical and accountable for the advice they provide, today’s reality is that, with few exceptions, anyone can call himself or herself a financial planner without meeting any required minimum professional standard,” he adds. “Competency and ethics requirements specifically for financial planners exist only through voluntary certification such as CFP®.”
But steps are being taken to change that.
“Through engagement with governments, regulators and the public by FPSC and other stakeholders, we are moving ever closer to that goal,” says Mr. List. “Canadians need to know they can trust their financial planners to help them achieve financial well-being.”
Ms. Houle-LeSarge says Canada’s 22,000 professionally certified financial planners need to be financial literacy ambassadors.
“In some ways, financial planners are teachers and counsellors, sometimes even psychologists,” she adds. They can make a real difference in a client’s life, and that helps to spread the word of the value they add to financial planning.”
Mr. List agrees.
“We need to help consumers take ownership of their personal financial affairs and ensure that they see value and importance in getting the right advice from the right people,” he says. “And even more than consumer awareness, we need collectively to drive appropriate, positive action and consumer behaviours.”
Part of that positive action is knowing how to identify and hire a competent and ethical financial planner who will put their interests first, adds Mr. List.
“Ultimately, consumers looking for financial advice need to know that they can trust in transparent, rigorous standards that are effectively enforced to ensure that they are getting the best advice.”
Overall, says Mr. List, the changes since 2009 have been remarkable for an industry whose roots go back to the founding of Canada.
“I am encouraged by the fact that the pace over the past eight years and look forward to continued and increasing progress as we approach 2020.”