Inside FP Canada's push against the tide

FP Canada unveiled their strategic plan today, outlining their goals for the next five years of operations. Within a researched overview of the challenges facing Canadian finances and the financial services industry, the plan highlights three core goals: excellence in operations, becoming the organization of choice for professional financial planning, and improving consumer access to professional financial planning. It’s that third goal, built on the foundation of achieving the first two, that opens a novel area of exploration for the whole industry: how do we improve access in a period where fee-based models disincentivize mass-market advice?

Tashia Batstone, President & CEO of FP Canada, outlined her view of the challenges now facing this industry, as well as the wider changes in Canadian society that informed the strategic plan. From the rise of generative AI, to the role of certification, to the shifting nature of advice the FP Canada board pulled from a host of experts to inform their future strategy. Batstone explained how and why they arrived at the goal of improving planning access and how she hopes to achieve that goal in the coming five years.

“Our job is to advance professional financial planning. In that context, we want to help ensure that all Canadians are financially resilient,” Batstone says. “We can't be all to everybody, but if you take the mandate and the vision and you combine them, you see that the role that we play is in enabling financial wellness for all Canadians through the advancement of professional financial planning.”

The three strategic priorities in their plan, Batstone says, are in service to that goal. In achieving the strategic priority of improved access, Batstone sees a wide array of challenges. Simple economics are one, the cost and availability of financial planning services may prohibit interest from many Canadians. Education is another hurdle, as many Canadians who have never used a financial planner may not know the benefits of the service, they might not know that planning can make them more financially resilient.

Batstone says that FP Canada and the whole industry have a job to do in terms of consumer education around the value of planning. She wants to explore areas that could spark greater consumer interest in planning, like tax credits which might improve access. Title protection is key to this effort, too, because if more consumers are seeking financial planners she wants to ensure they are protected. The supply of planners is also a crucial element, because if her goal is to drive more Canadians to financial planning services, Batstone is aware that the industry must be ready to meet any uptick in demand.

Beyond those incentives and efforts, Batstone sees a huge gap in access for the people who may most greatly benefit from financial planning services: Canada’s most vulnerable. There is a segment of the population for whom going into a financial institution and working with an advisor is not an option. In an effort to serve those people, FP Canada recently launched a new charitable effort aimed at giving vulnerable populations access to a planner.

In these efforts, though, Batstone is pushing somewhat against the economic tide. Fee based models, DIY platforms, and margin compression have pushed advisors towards a focus on smaller sets of higher net worth clients. Widening access may not be as clearly in the economic interests of advisors. Batstone recognizes that and says that FP Canada is working on ways to change those economics. That includes pushing for tax credits with the federal government.

It also includes segmenting the market more, encouraging preliminary planning sessions and quick informational exchanges that can help Canadians without an advisor taking on the full-scale work of a financial plan. Injecting more planning into the ordinary financial services interactions that middle-income Canadians have can go a long way in achieving this goal, Batstone says.

AI may also be changing these economics. The efficiencies that could be created by generative AI tools and processes may free up advisors’ time. Batstone says that there are opportunities, then, for advisors and planners to use that extra time to serve more clients. One of the issues with the mass market has been that the regulatory burden and time issues make these clients somewhat lower margin. If advice can be made more efficient by AI, then perhaps those economics might change.

As Batstone and FP Canada push against the economic tide in their strategic priority of improving access to advice, they’re leaning on their other two priorities to help achieve them. Becoming the credentialling body of choice should cement FP Canada’s place as a thought leader among advisors and give them a platform to continue to advocate for greater access to planning. Improving their own internal operations and maintaining high standards, too, is key to the achievement of any other goal they set themselves.

“The three of them are intricately linked, and they're prioritized. Access is the first priority, excellence in terms of being the organization to ensure that consumers are getting that best trained individual comes second. And then finally, making sure that we have all of the infrastructure, technology, etc, in place to deliver on objectives one and two,” Batstone says. “They're not three separate strategic objectives. They're very interconnected.”