Is financial planning beneficial for Canadians? Or is it only necessary for the people with sufficient cash flow? Ashton College will unravel the main three myths associated with Financial Planning in Canada.
Canadian Financial Planning Week (November 16-22) is an ongoing effort by the Financial Planning Standards Council (FPSC) and the Institut qu├®b├®cois de planification financi├¿re (IQPF) to raise awareness of financial planning as fundamental to the financial well-being of Canadians. So what are the main misconceptions behind Financial Planning?
1. I’m young, I don’t have to worry about financial planning
Being young puts you at a huge advantage, because time is on your side. Retirement may seem miles away, but there are plenty of shorter-term goals, such as travelling, buying a car or saving for a house, that could use a little forethought. Getting into the habit of budgeting and creating a plan early on will better prepare you for financial challenges down the road.
Sure, you could do all the research and create your own financial plan. But not everyone has the expertise to come up with the best strategy nor the discipline to stick with it.
A qualified planner can advise you on how to save, invest and grow your money so you can meet both your short and long-term goals using your income, assets and other available resources.
2. Financial planning is just for the wealthy
Ken Waltzer, a Certified Financial Planner (CFP) and president of Kenfield Capital Strategies says: “If I look at my clients, the ones who have the most money today in retirement, it’s not the people who earned the most,” he said, noting one of his clients is a schoolteacher with more than $1 million in the bank. “It’s the people who saved the most.” (Source: http://www.cnbc.com/id/101316491)
Financial planning is for people of all income levels. If you haven’t much money to start with, Certified Financial Planner and Ashton College instructor Becky Wong advises: ” When researching, find out if the CFP will work with a minimal asset size. Some CFPs will only work with you if you have a minimum worth of say $200,000.” Don’t take this personally; just find a planner who works with clients in a similar financial situation as you.
No matter how rich or poor, people’s basic goals are similar: To live comfortably and protect themselves financially. Even a few hundred dollars can get you started and generate good results over time.
3. You should only work with a Certified Financial Planner
“In most Canadian provinces, there is no legislated standard in place for those who offer financial planning services. With the exception of Quebec, people who call themselves financial planners are not required to obtain any credentials whatsoever.” – Financial Planning Standards Council (FPSC)
While it’s not mandatory to become certified, many Financial Planners are choosing to get the extra qualification.
Alex Chan has a total of five professional designations including both the Certified Financial Planner (CFP) and Elder Planning Counselor (EPC) designations from Ashton College. He says: “Consumers are smarter than ever and they are looking at your qualifications. I wanted that added credibility on my resume – something to reassure my clients and my peers. Ashton could provide me with the credibility within the industry that everyone is looking for.”
To become a Certified Financial Planner (CFP), financial planning professionals must undergo additional FPSC-approved study, pass a rigorous exam and complete three years of qualifying financial planning work experience. CFPs are also bound by a strict code of ethics, which includes always placing the client’s interests before their own.
To find a Certified Financial Planner in your area visit the Financial Planning Standards Council (FPSC) website. If you’re interested in becoming a CFP, check out Ashton College’s CFP programs including the flexible CFP Fastrack Program.
Read about other common financial planning misconceptions and in our next post, we’ll tell you how to turn your daily coffees into a million dollars.