It’s no secret that digital technology is reshaping the world of work, touching every sector of the economy — including financial services. You’ve probably encountered a multitude of online articles about how fintech is poised to transform how Canadians manage their finances.
There’s a lot of truth to this message. Fintech is becoming increasingly sophisticated, and the financial services sector needs to continue to adapt. The good news is that artificial intelligence (AI) and other technologies are creating new efficiencies, allowing financial planners and other professionals to spend more time working directly for, and building strong relationships with, their clients.
Of course, planners understand the value of their human expertise, and a growing number are also aware of the benefits of thoughtfully leveraged fintech. However, for some, there may be a less nuanced understanding of how Canadians perceive the value of financial planning — and how they want to receive advice.
When it comes to the motivations of consumers, it’s easy to rely on narratives that appear frequently in the media. Regarding financial planning, there are many often-repeated assumptions that inevitably influence how planners view those seeking advice. For example, many assume that young Canadians prefer to do it themselves or can rely on digital solutions.
However, Pollara research commissioned by FP Canada in 2023 found that those age 18 to 34 are more likely than any other demographic (73%) to say the federal government should prioritize policies and initiatives that make financial planning services more affordable and accessible. While the majority of polled Canadians also felt that should be a priority (63%), this spike in support among young people suggests many individuals at the beginning of their earning years are looking for support to develop better financial behaviours.
Needless to say, there’s a significant opportunity for planners and other financial services professionals to help consumers — including millennials and members of gen Z — build their wealth and achieve financial well-being. It’s worth remembering that younger demographics appear to be more open to traditional planning services than previously thought.
Perhaps none of this should come as a surprise. We’re living in a time of significant economic volatility, which is leading to financial challenges that consumers must try to navigate. Unaffordable housing, student debt and a lack of access to workplace benefits are just a few of the issues many young people face. While smartphone apps and social media platforms may help meet their social, retail and entertainment needs, the financial needs of younger generations — and all generations — are more complex.
It seems most Canadians understand that complex financial challenges require human expertise. Many consumers seem to intuitively realize that, while AI can provide enhanced data analytics that aid planners in decision-making, it can’t replace the big-picture perspective provided by financial planning professionals. Nor can it take the place of the relationship between a client and their planner, which can lead to deep, personalized financial planning insight.
Put simply, members of the financial planning profession must carefully consider popular narratives about Canadians, their finances and fintech — and work toward a nuanced understanding of consumer motivations. At FP Canada, we believe the future of professional financial planning will continue to be human-centric and that the demand for one-on-one advice across all age demographics will grow. The development of more technology-enabled solutions will also allow financial planners to be more efficient and effective and add more value for a greater number of Canadians.
Focusing on human insight while enhancing it with fintech will also allow professional financial planners to connect with people who, historically, may have been less likely to see financial planning as something they can access. Reaching out to these groups, which include younger Canadians, has never been more critical.
As previously mentioned, millennials and members of gen Z face unique financial challenges — at a stage when they’re still building their financial futures. Not knowing how to manage wealth that’s currently accumulating or set to be inherited presents a significant challenge for younger Canadians. This becomes particularly important when, by some estimates, Canadian baby boomers will pass on about $1 trillion by 2026.
As we seek to better support the younger demographic and create generational change, we must remember that those who grew up interacting more with technology expect their in-person experiences to be complemented by digital solutions. By strategizing ways to reach these demographics (such as creating strong online presences and leveraging new technologies such as AI), members of the profession can connect with the wealth builders of tomorrow.
While digital platforms provide the convenience, affordability and immediacy that younger generations value, the guidance of a human planner adds depth and personalization to the experience. Technology can streamline processes, deliver tailored advice and educate users on financial principles, making financial planning more accessible and less daunting.
Meanwhile, human planners can offer emotional support, nuanced insights and adaptive strategies that technology can’t provide alone. A hybrid approach allows younger individuals to benefit from the best of both worlds — leveraging digital tools for efficiency and connecting with human planners for personalized, relationship-driven advice — empowering them to make informed financial decisions and build a secure future.
In an evolving economic landscape, many consumers are showing an interest in partnering with a financial planner to tackle their finances. By digging deeper to understand their attitudes, preferences and expectations, the profession can continue to deliver advice that helps Canadians achieve the financial well-being they deserve — whether they’re 19 or 90.
Tashia Batstone is president and CEO of FP Canada.