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One-in-three Canadians would fail financial stress test

Financial Planning Standards Council survey compares the financial health of Canadians in each province for Financial Planning Week

TORONTO, ON – October 30, 2018 – A national survey commissioned by Financial Planning Standards Council (FPSC) reveals that one-in-three Canadians (33%) would fail the financial stress test – meaning they somewhat or strongly doubt their bank account would withstand a financial emergency (such as a car repair or emergency vet bill).

The FPSC Cross-Country Checkup, a Leger poll of 1,527 Canadians, was conducted in advance of Financial Literacy Month and in particular Canada’s 10th annual Financial Planning Week (taking place between November 18-24). The poll takes the pulse of Canadians on a series of financial questions and breaks down responses on a province-by-province comparative.

The poll not only compares the provinces on issues such as how prepared people are for financial emergencies, but also examines how likely they are to engage professional financial planning guidance, as well as deterrents to seeking advice, such as embarrassment, lack of trust and portfolio size.

“The results of the FPSC survey bring to light some provincial differences regarding the financial habits and intentions of Canadians,” says award-winning author, personal finance educator and FPSC’s Consumer Advocate, Kelley Keehn. “As Financial Planning Week approaches, it’s important to level set your financial situation and not be paralyzed by confusion. A Certified Financial Planner® professional can open your mind to what is possible and get you moving in the right direction.”

Below are the highlights of the FPSC Cross-Country Checkup survey including provincial breakdowns:

One-in-three Canadians fail the stress test (33%), meaning they somewhat or strongly doubt their bank account can withstand a financial emergency. That number rises to 45% in Atlantic Canada and drops to 28% in Alberta.

Nearly three-in-10 Canadians are not confident they will achieve their financial life goals (28%). Those living in the Prairies (Manitoba and Saskatchewan) exceed the national average where almost four-in-10 report a lack of confidence (36%); however, that number drops to less than one-in-four (24%) for those living in Ontario.

Nearly two-thirds of Canadians (64%) do not have access to an employer retirement savings matching program.

  • One-in-four (25%) Canadians take advantage of an employer RRSP savings matching program,  but 64% do not have access to such a program. That makes planning for the future even more critical to their long-term financial health.
  • Atlantic Canadians have the least access to employer matching programs, with 71% reporting that this option is not available to them, while Québécois fare much stronger than the national average at 57% 

Despite these trends, two-thirds of Canadians have not engaged the services of a professional financial planner (65%). That number is highest in Atlantic Canada (76%) and Quebec (73%), and lowest in Alberta (57%) and British Columbia (58%).

There are several reasons that Canadians cite for not seeking out the services of a professional financial planner, with the primary misconception being that they feel their portfolio is too small to engage a planner (50%).

Other reasons Canadians have not engaged the services of a professional financial planner include:

  • 22 per cent of Canadians without a planner do not know who to trust – that number is highest in Alberta (28%) and lowest in Atlantic Canada (13%)
  • 20 per cent of Canadians without a planner say it is all too confusing and overwhelming. – that number is highest in British Columbia (25%) and lowest in Quebec (12%).
  • 19 per cent of Canadians without a planner are embarrassed by their financial situation –  that number is highest in Alberta (21%) and lowest in British Columbia (16%)

Here are some other standout findings:

  • 20% of Canadians rarely or never pay off their credit card balance each month – that number is highest in Atlantic Canada (28%) and lowest in Quebec (17%).
  • Six-in-10 (62%) rarely or never maximize their RRSP contribution each month based on eligible amounts – that number is highest in Atlantic Canada (67%) and lowest in Ontario (57%).
  • One-in-three (33%) rarely or never set aside savings at the end of the month, after all expenses have been paid – that number is highest in Atlantic Canada (42%) and lowest in B.C. (30%).

Financial Planning Week is an integral part of Financial Literacy Month and part of an ongoing effort to raise awareness about the value of financial planning with a professional planner. 

CFP® professionals have the knowledge, skills, experience and accountabilities to help you understand all aspects of your finances and are obligated to put your interests first. FPSC encourages all Canadians, regardless of their financial circumstances, to seek out the services of a professional financial planner.

More information and tips on finding a financial planner are at FinancialPlanningForCanadians.ca. To find a professional financial planner in your area, visit FindYourPlanner.ca.

The full results of FPSC’s Cross-Country Checkup survey can be found here.

About Kelley Keehn

Kelley Keehn is an award-winning author, personal finance educator and is the Consumer Advocate for the Financial Planning Standards Council (FPSC). She has written nine books on personal finance including Protecting You and Your Money; A Guide to Avoiding Identity Theft and Fraud and A Canadian's Guide to Money Smart Living. Kelley is the Marilyn Denis show’s personal finance expert, was the host of the W Network’s Burn My Mortgage, sat on the National Steering Committee on Financial Literacy, currently serves on the Financial Consumer Agency’s Consumer Protection Advisory Committee, the Ontario Securities Commissions’ Seniors Expert Advisory Committee, and is a member of the OECD’s International Network on Financial Education.

About Financial Planning Standards Council
A professional standards-setting and certification body working in the public interest, FPSC’s purpose is to drive value and instill confidence in financial planning. FPSC ensures those it certifies―Certified Financial Planner® and FPSC Level 1® Certificants in Financial Planning―meet appropriate standards of competence and professionalism through rigorous requirements of education, examination, experience and ethics. With FPSC’s formal partnership with the Institut québécois de planification financière (IQPF), which is the only organization authorized to certify Financial Planners in Québec, there are more than 23,500 Financial Planners in Canada who have met, and continue to meet, FPSC’s standards. More information is available at FPSC.ca and FinancialPlanningForCanadians.ca.

About the FPSC Cross-Country Checkup

Leger conducted a survey of 1,527 Canadians online between September 28 and October 1, 2018, using its online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-2.5%, 19 times out of 20. Leger’s online panel has approximately 475,000 members nationally – with between 10,000 and 20,000 new members added each month and has a retention rate of 90%.

Websites
http://www.financialplanningforcanadians.ca/
http://www.findyourplanner.ca/
http://www.kelleykeehn.com/

Contact for more information
Lyndsay Wallis
MAVERICK
Office: 416-640-5525 x 240
Mobile: 226-979-6941
Email: lyndsayw@wearemaverick.com