Households who engage the services of a planning professional have lower levels of financial stress when sticking to a plan
It’s become socially acceptable, if not expected, that we work with coaches and consultants to nail the skills we need – and that should certainly include managing our finances.
New research commissioned by FP Canada and conducted by the non-profit Financial Resilience Institute has found that those households who work with a financial planner (FP) have a significantly higher level of financial resilience than those who don’t.
Using the same model as the Financial Resilience Index - a measure of financial resilience including a household’s ability to get through financial hardship, stressors, and shocks from unplanned life events - the research polled 5,010 Canadians including 1,340 who work with an FP to explore the potential link with financial resilience.
It found that those who do not work with a financial planner had a mean financial resilience score of 48.1, while those who did had a mean score of 59.6 and scored significantly higher for:
- having a liquid savings buffer
- self-reported credit score
- confidence in the ability to meet short-term savings goals.
Those working with an FP and adhering to a financial plan also revealed lower levels of financial stress and higher levels of financial wellness.
"These important new findings from Financial Resilience Institute confirm our belief in the impact financial planners can have on improving the financial resilience of Canadians across varying income demographics," says Tashia Batstone, president, and CEO of FP Canada. "These are vital learnings as Canadians and policymakers work to build a strong and resilient economy."
Struggling households
The Index reading in February calculated that 78% of Canadians (around 20 million people) were feeling financial vulnerability, affecting their mental and physical health.
"At a time of economic volatility with many Canadians facing affordability challenges, Canadians working with professional financial planners have experienced positive outcomes as related to their financial resilience and well-being," says Eloise Duncan, CEO and Founder of the Financial Resilience Institute, creator of Institute's Index and author of the report.
