Canadians still hold misconceptions about financial planning, but the advisors they go to for help note new clients today come to them better informed than those of three years ago.

Sixty-five per cent of the 803 Certified Financial Planner (CFP) professionals who responded to a recent survey conducted by Financial Planners Standards Council (FPSC) said that more than half of new clients initially harbour many misconceptions about financial planning.

One-quarter of respondents said that between 26% and 50% of their new clients hold these misconceptions. However, the majority (84%) of the survey respondents said the proportion of new clients that come to them with an incomplete or inaccurate understanding about professional financial planning is less than it was three years ago.

“That clients of CFP professionals are better informed now about the financial planning process and what to expect of a planning professional than they were three years ago, suggests the consumer knowledge needle continues to move in the right direction,” says FPSC vp communications and corporate relations, Ann Bowman.

“However, consistent with the conclusions we drew from FPSC’s 2003 consumer survey, there is a real need for the financial services industry to deliver clear, unbiased messages about what is and isn’t true about financial planning.”

Bowman says there is also a need for Canadians to take responsibility to find out for themselves what they need to know and, “there is no better place to start learning about financial planning than at the FPSC website at www.cfp-ca.org.”

Conducted in September, advisors were asked if, in their experience, new clients come to them with misconceptions about financial planning. Among the most prominent mistakes were:

  • confusing financial planning with investing;
  • think financial planning is the same as retirement planning; and failing to set measurable financial goals.

The total number volunteer respondents represent approximately 5% of the total population of CFP professionals in Canada. The results are accurate within +/- 5%, 19 times out of 20.