Do You Really Have a Financial Plan?

It’s All About the Big Picture


If you think a financial planner only handles your RRSPs or taxes, or that financial planning is the same as investment planning, you’re only seeing part of a much bigger picture. In fact, you may be missing out on many of the benefits that the financial planning process has to offer.

Originally published by Financial Planning Standards Council. Republished with permission.

What exactly is “Financial planning”?

Financial planning takes a holistic, big picture view of you, your lifestyle, and your financial needs and priorities. Without this broad approach, it’s like trying to see out a window with the curtains half-closed. You need the full view to understand and make the right decisions about every aspect of your finances

What does a Financial plan include?

A comprehensive financial plan covers every area of your financial life, from investments and real estate to insurance and retirement planning. There are a number of financial planning areas that a comprehensive financial plan may take into account:

  • Financial Management: Your current and projected future financial position, including cash flow (the balance of what you’re earning, spending and saving), budget and net worth.

  • Insurance and Risk Management: Strategies to minimize your exposure to unexpected financial loss due to death, health issues, property damage, business and other risks.

  • Investment Planning: Managing your investments based on past experience, attitudes, objectives, times horizon, risk tolerance and need for income.

  • Retirement Planning: A plan for your post-employment financial well-being, comparing your desired retirement lifestyle with retirement assets, planned savings, expected sources of income and return on investment.

  • Tax Planning: Your current and future tax obligations and strategies to minimize or defer taxation on personal and/or business income.

  • Estate Planning: Arranging for payment of expenses and obligations after your death, as well as transfer of your wealth and other assets to successors as specified in your will and outside your will.

  • Legal Aspects: Your legal rights and obligations, including spousal and child support obligations or entitlements, third party obligations, shareholder, partner or trust agreements, and powers of attorney or mandates. 

How can a Financial planner help bring it all together?

An appropriately qualified financial planner like a CERTIFIED FINANCIAL PLANNER® professional will take your full financial picture into account, guiding you on how a decision about one aspect of your finances may affect other key areas. For instance, an investment decision could have tax consequences that are harmful to your estate plan, or a choice about saving for a child's education may affect when and how you meet your retirement goals.

Your financial planner can take many seemingly conflicting priorities into account and help guide you toward the right decisions—the choices that will help you reach your financial and life goals, both today and in the future.


Traits of an Ethical Financial Planner

If you think finding an ethical, qualified financial planner is simply a matter of Googling “financial planner”, better think again.

Across Canada (except in Quebec), anyone can currently call themselves a financial planner without having any qualifications to back it up. But when it comes to taking care of your finances, now and for the future, you need the best. After all, you’ve worked hard for your money, and making it work hard for you means having a professional on your side. Before they can become certified, CFP® professionals go through a rigorous program of education, examinations and work experience to prove their worth.

But that’s not all: FPSC certificants, including CFP professionals, must adhere to the eight-point FPSC® Code of Ethics that emphasizes accountability, to the public, clients and colleagues. The Code of Ethics is vigilantly enforced by Financial Planning Standards Council (FPSC), which works in the public interest.

Originally published by Financial Planning Standards Council. Republished with permission.

Here are the principles. Use them as a measure to find the right professional to help secure your financial future:

Put my clients’ interests first

Top of the list is a written obligation to put clients’ interests first at all times - even if there are differences in compensation for selling one product over another. To maintain certification, every CFP professional must re-attest to this principle annually and agree to be bound by it and accountable.

Act with integrity

Trust and confidentiality are cornerstones of integrity. A CFP professional must uphold the principle of integrity at all times, inspiring confidence and upholding a strong moral compass. You’re entrusting your financial future to your planner. It’s only right they be held to the highest ethical standard.

Be objective

Objectivity means keeping emotions, personal bias and competing priorities out of the decision-making process. CFP professionals make recommendations based on sound knowledge, strong judgement and a full understanding of their clients’ goals and objectives. 

Be fair and open

Fairness is about impartiality and disclosure. CFP professionals must be honest and objective, providing advice and planning without regard to compensation, bias, employer or any other interests. They must also communicate at a level that’s understandable to clients. When you begin working with a CFP professional, he or she will clearly and transparently communicate to you the services to be provided.

Maintain competence

It’s not enough to qualify for CFP certification just once in a lifetime. In addition to meeting demanding certification requirements, CFP professionals must keep their skills up-to-date and develop additional knowledge throughout their career. This enables a CFP professional to provide effective advice and service to clients as the financial environment evolves and individual circumstances change.

Maintain confidentiality

As electronic data storage becomes more pervasive, the protection of private information is critical. A CFP professional is bound to ensure the protection of all client data regardless of how it is stored or delivered. That includes digital and paper files and correspondence, as well as verbal discussion.

Act diligently

Diligence is about being mindful when guiding, informing, planning and delivering financial advice and services to clients. Circumstances can change quickly in your life and the world around you. A CFP professional has the knowledge and ability to respond effectively to those changes and help motivate you to take actions that will help you reach your financial goals.

Act professionally

Beyond the expertise required to practice in a field, it’s the high standard of ethics, behaviour and service, and the manner in which the service is delivered, that sets an individual apart as a professional. By following the FPSC® Code of Ethics, CFP professionals hold themselves to a level of professionalism that inspires confidence, respect and trust. The CFP designation is the mark of a professional that puts clients’ interests first.


Here is the Plan

"When life is in transition, money is in motion."

- Mitch Anthony

Career changes, relocations, family expansions—or the many other events that you plan for, dream about, or don’t expect at all—can be financially unsettling. A sound financial plan will help you make informed choices when faced with life’s inevitable changes.

Originally published by Financial Planning Standards Council. Republished with permission.

When you have the right Financial Plan for your circumstances…

  • You can balance what you need and want today with the personal goals you have for the future.

  • You won’t wonder whether you can afford the vacation or the house or the college tuition — you’ll know.

  • You can take control of your future and achieve your personal objectives.

  • You’ll have a financial cushion when unexpected expenses crop up.

  • Most reassuring is that a good plan will help you live the life you want with the resources you already have.

A professional Financial Plan requires a professional Financial Planner

Today in Canada, outside of Quebec, anyone can call themselves a financial planner. There is no regulation that restricts the use of this title. So how do you know that the person you’ve engaged to be your planner has the appropriate knowledge, skills and abilities to earn your trust? Insist on finding someone who holds the CFP® designation.

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©2019 De Thomas Wealth Management