According to the 2019 RBC Financial Independence in Retirement poll 48% of those in BC do not yet have a financial plan. Of the 52% that do have a financial plan 32% of these admitted the plan is in their head. This means that 65% of those in BC have no written financial plan. According to Fidelity’s Retirement 20/20 Report 83% of people feel better prepared for retirement when they have a written retirement plan in place and of those who are retired, 96% of them feel better prepared with a written plan
My guess would be that those that have their financial plan in their head may have an amount they want to save. For example, the financial plan may be to save $1 million dollars in order to retire. While this is better than having no plan it still leaves a huge amount of what should be in a real financial plan not addressed.

A real financial plan should be a roadmap to take you to financial independence and beyond. The financial planning process we use at Planwell includes 12 areas:

• Retirement or Financial Independence Plan
• Budgeting and Cashflow Plan
• Debt Plan
• Mortgage Plan
• Investment Plan
• Fee Plan
• Pension Plan
• RESP Plan
• Real Estate Plan
• Insurance Plan
• Tax Plan
• Estate Plan

Each of these areas is very important and needs individual attention and regular updating. As life progresses different areas of the plan become more and less important. We know that goals help motivate us to accomplish things and the financial plan lets us establish goals and objectives that can then be worked towards. As Benjamin Franklin said, “If you fail to plan, you are planning to fail.”

I would also guess that the 35% of the RBC poll that say they have a financial plan in BC may have a very simple financial plan that may cover a couple of the 12 areas, but rarely do we see incoming new clients that have existing comprehensive financial plans. Even less do we see prospective clients that regularly revisit their financial plan and use it as a tool to help guide them towards their financial goals and dreams.

At Planwell we have created the Planwell Financial Planning Checkpoint System which allows us to establish along the way the measurable goals for our clients and then every 6 to 12 months check the progress towards these goals and take the appropriate action if necessary to get things back on course, or a new course if needed.

We think it is alarming that almost two-thirds of those in BC have no written financial plan. We also no that since there is no standardization of financial planning across most of Canada that the quality and meaningfulness of financial plans and the financial planning processes used can be very different. Unfortunately, there are a lot of financial plans that are pumped out by financial advisors, financial institutions and now online advisory companies that are very weak plans and offer no meaningful follow up.

Unfortunately, in Canada almost anyone can call themselves a financial planner and a lot of financial plans are being produced by people and companies that do not have recognized financial planning designations. Our advice is to ensure at a minimum that you only rely upon a financial plan produced by an individual that has a recognized financial planning designation in Canada like the Certified Financial Planning designation (CFP®).

Having a real financial plan could be one of the most important documents you have as you accumulate your wealth, maximize your wealth, protect your wealth and ultimately transfer your wealth to those you choose. Please contact us to help you create your own real financial plan.