Financial Resilience Institute
July 18 · 5 mins
Financial Resilience Institute report highlights the role of professional financial planning as a pathway to improving financial resilience
Financial Resilience Index model data shows higher financial resilience scores among households working with financial planners
VANCOUVER, B.C. July 18 2023 – A new study by Financial Resilience Institute, a non-profit organization and the leading independent authority on financial resilience and financial well-being in Canada, indicates that Canadians who work with financial planners have higher levels of financial resilience than those who don’t.
The white paper, entitled “Financial Planning: A Pathway to Improved Financial Resilience,” paves the way to potential solutions in response to Canadians’ ongoing struggles with financial resilience and vulnerability.
Financial Resilience Institute measures household financial resilience, defined as a household’s ability to get through financial hardship, stressors and shocks as a result of unplanned life events, through its peer-reviewed Financial Resilience Index model. The Index measures households’ financial resilience across nine behavioural, sentiment and resilience indicators at the national, provincial, segment and individual household level three times a year, with a pre-pandemic Index baseline of February 2020.
Based on the seventh February 2023 Index, just under 20 million households or 78 per cent of Canadians across all income demographics were experiencing financial vulnerability, affecting their mental health and physical well-being.
Key Findings:
The Institute leveraged its Index model to explore whether an association between people working with a financial planner experienced improved financial resilience and financial well-being. Based on a sample size of 5,010 adult Canadians including 1,340 survey respondents working with a financial planner, it found:
- Households working with a financial planner have a mean financial resilience score of 59.6 compared to a mean score of 48.1 for those not working with a financial planner.
- Across the nine indicators of financial resilience, those working with a financial planner show a significantly higher score when it comes to the indicators of having a liquid savings buffer, self-reported credit score and confidence in the ability to meet short-term savings goals.
- People working with a financial planner and adhering to their financial plan have lower levels of financial stress.
- Adhering to a financial plan has a positive impact on a household’s financial resilience and financial wellness.
“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.
This research was commissioned by FP Canada and the Institut québécois de planification financière (IQPF).
“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.”
Chantal Lamoureux, President and CEO of IQPF, agrees. “Building financial resilience requires a multi-faceted and deliberate approach, with people’s consumer and financial decisions, behaviours and other factors having an impact,” she says. “Financial planning is not a cure-all, but this shows it’s an important enabler of financial health, resilience and well-being.”
About FP Canada
Established in 1995, FP Canada is a national not-for-profit education, certification and professional oversight organization working in the public interest. FP Canada is dedicated to championing better financial wellness for all Canadians by leading the advancement of professional financial planning in Canada.
About IQPF
For over 30 years, the Institut québécois de planification financière has been a pillar of financial planning in Quebec. It has established itself on the North American scene by setting the highest standards. The Institute has made the financial planner the expert sought after by all consumers concerned about preserving and increasing their wealth. As a leader in developing and promoting personal financial planning, the Institute’s mission is to ensure that today’s and tomorrow’s financial services professionals have the knowledge, the know-how and the social skills required to contribute to the financial well-being of people, families and communities. For more information, visit IQPF.org.
About Financial Resilience Institute
Financial Resilience Institute is a non-profit organization dedicated to improving the financial resilience and well-being of Canadians and global citizens. It is the leading independent authority on financial resilience and financial well-being in Canada.
Media:
For further information or to request an interview regarding the Financial Resilience Institute’s latest findings, please contact:
Vesselina Davenport, PR Manager: ina@finresilienceinstitute.org
Eloise Duncan, CEO and Founder, Financial Resilience Institute: eloise@finresilienceinstitute.org
www.finresilienceinstitute.org
Seymour Financial Resilience Index® is a registered trademark used under license by the Financial Resilience Society.