-Find out what FP Canada's Imagine 2030 vision is and what they are doing to see it come to life. -Learn how financial planning can lead to financial, mental and physical wellness. -Discover how a financial planner can fit in your life while working with other professionals.
Managing your finances can be difficult and stressful. This is especially true when you don’t know how financial planning works. Financial planning is essential for anyone who wants to achieve financial security and wellness. Fortunately, professional financial planners are here to help you build a plan and implement it for a better, financially secure life.
In this episode, Tashia Batstone joins us on Smart Advice. As the President and CEO of FP Canada, Tashia is passionate about promoting financial wellness among all Canadians. She talks about the changes that need to be made to encourage people and educate them on financial planning. We dive into how financial planning can help improve life for all Canadians.
Don't let your finances get you down. Listen to this episode to find out how financial planning can help you!
Carissa Lucreziano: Welcome to Smart Advice, a podcast bringing you financial advice, investment strategies, and economic trends. I'm CIBC’s financial advice expert, Carissa Lucreziano. And today we're going to explore the role of financial planning when it comes to financial resilience.
The effects of rising costs, higher interest rates, and the inflation battle just this year alone has been heavy. For all Canadians, it has resulted in less disposable income than we were used to and for many, resulted in higher debt-carrying costs and stretched time horizons to achieve goals like mortgage freedom. This financial awakening has forced us to pay closer attention to spending habits and prioritize and push off goals like early retirement. It has also, in some cases, shifted our mindset to be more in tune of how much we use debt for consumption. And at the crux of it all, achieving financial resilience is definitely a goal worth setting.
A new report commissioned by FP Canada and from the Financial Resilience Institute found that households that work with a financial professional have improved financial wellness and a greater ability to achieve their financial goals and they experience less financial-related stress. In a nutshell, they are better positioned for the unexpected.
We're going to talk about this in more depth, and I couldn't think of a better person to have this conversation with than Tashia Batstone, president and CEO of FP Canada, Tashia has made a significant impact through her career in financial services. She joined FP Canada in May 2021, stepping into the CEO seat. Prior to that Tashia played an instrumental role in the unification of the accounting profession in Canada and led the development of the CPA certification program. And in 2020, she was named Practice Ignition’s Top 50 Women in Accounting globally.
Since 1995, FP Canada has been leading the advancement of professional financial planning in Canada and is dedicated to championing better financial wellness for all Canadians. The organization focuses on education but at the core professional oversight certification of the certified financial planners and the qualified associate financial planner designation. There are 20,000 planning professionals currently that form part of FP Canada's alumni, and many of which provide financial advice to Canadian families across the country each and every day. Tashia, welcome to the podcast. I am so happy you're here with me today.
Tashia Batstone: It's a pleasure to be here and a wonderful opportunity to join you today, Carissa.
Carissa: Yes, absolutely. And since like almost the day you stepped in as CEO of FP Canada, I feel like I remember our very first conversation and the immense passion you exuded for the profession of financial planning and the strong belief that you have that all Canadians should experience financial wellness.
One of your biggest pieces of work, we've talked about it, I have looked through it and still have it by my desk side, and I know is very much in flux now, is FP Canada's Imagine 2030 Plan. Which is a pledge to bring financial wellness to all Canadians. And you know, there's such a defined focus within it. Recognition of the profession, providing a conduit for financial confidence for Canadians, and working towards that goal for every Canadian to have access to financial planning and advice. And I know to part of this pledge is for you and your team to work closely with the financial ecosystem to achieve all of this. So why is this so important to you? To the profession of financial planning? And to Canadians?
Tashia: That's a great question, Carissa. The reality of it is, for FP Canada, Imagine 2030 has become our north star. It really is our vision for a future where Canadians from all walks of life and culture, have access to professional financial planning. We've put an earmark around it by the year 2030. But you know, the more that we can do in advance of that, obviously, the better off we will be as Canadians.
We want financial planning to be recognized as a true profession and for Canadians to embrace the use of financial planning to enhance their financial wellness. And through Imagine 2030, we're focusing on five areas. Canadians to recognize the profession more broadly. And by that, I mean all of our 20,000 certificates who support Canadians. The financial services industry, because as you said, we belong to a system and we can't make these changes ourselves. Of course, the government also has to play a role in policy decisions to support financial wellness for Canadians.
And then, as you know, and as we've said, FP Canada has a significant role to play ourselves in making sure, for example, that we ensure there are enough financial planners to meet the needs of Canadians. And also to ensure that those financial planners come from a very diverse group of individuals because as we all know, Canadians are very diverse and financial planning is a very personal conversation between your planner and your client. And so we think it's really important that when a client comes to speak to a planner, they can talk to someone who looks like them, who speaks their language. And therefore, for us, diversity is becoming critically important.
We're doing a variety of things, pulling a number of levers I often refer to, to help us achieve our Imagine 2030 vision. And that includes, as I said, trying to expand the diversity of financial planners in Canada. Really leveraging our CFP and our QAFP professionals to make financial information more freely available. Evaluating how technology can help more Canadians to access credible financial advice. So for example, on the technology side, we have a brand new initiative called Fintellect, which is really exploring the impact of emerging technologies, such as generative AI like chat GPT and what impact is that having on financial planning and access to financial planning.
To support our imagined 2030 vision, we have been doing a benchmark survey every year to assess how Canadians feel about the planning sector. What's the trust? What's their awareness? How do they view their own financial well-being? And you know, our study in the first year showed that clearly there is work to be done not only by FP Canada, but by the financial services sector in general. And we've just done our first follow-up, and, the reality of it is we still got a lot of work to do and we know that. So our commitment is we're going to do this survey year over year over year until 2030, to see what progress we're making to get sort of our north star of Imagine 2030.
Carissa: Yeah, well, I think you and your team have outlined a pretty robust plan with some pretty fundamental components of that vision. I think, too, like I've been around the table for many conversations on the efficacy of financial planning, and enjoyed a lot of them with you and your team and others within the industry. But I think too what you're doing in the plans that you also have to connect to the education of financial planning within colleges and universities, I think that's a really big thing, too. And something that is also evolving.
Tashia: Absolutely. I mean, we're working very closely with post-secondaries across the country to embed financial planning into their curricula. Recently had several accreditations of larger universities and colleges. So we're delighted because that's really where we're going to get more diversity. Through the post-secondary, get younger individuals in, more diverse individuals who are then prepared to serve a more diverse group of Canadians.
Carissa: Absolutely. So I know you've also published the financial stress index. And this is really sought to understand what the root causes are that lead Canadians to feel that financial stress. And how working with a financial professional can alleviate a lot of that. It's interesting if we know the feeling of you know, money woes decreases for those that work with a financial professional. Why do you think, within this study, that only 36% of Canadians have engaged with a financial professional? What an opportunity.
Tashia: I think there's a number of, you know, you talked about root causes. I think there are some things that we need to do as a profession and as leaders within the financial services sector. Certainly the work that we're doing around the financial stress survey, and the way that we try to promote the financial stress survey is to increase awareness. You know, a lot of Canadians just aren't aware of the benefits of financial planning and having that plan and following that plan.
It's very much akin to, I always compare it to getting a personal trainer, right? It takes a commitment, and it takes an investment in your physical well-being to engage with a trainer. And I would say engaging with a financial planner is making that same commitment of time and resources to improve your financial well-being which we know is going to have a benefit towards your mental and physical well-being.
I think there are also some things that we need to do from the profession’s side of it. Clearly, cost is a barrier. Oftentimes, financial planners, they are working with clients who have certain levels of wealth. There might not be an opportunity for someone who is sort of in that wealth-building phase get access to a financial professional. And that's something, for example, that we're addressing through our new QAFP, our reimagined QAFP credential. By putting a credential into the marketplace that is geared specifically for individuals working with clients who are building wealth, we are trying to increase that supply of financial planners who are trained and have expertise in working with clients who are building wealth versus somebody working at a high net worth individual.
So again, there are those elements that we have to be thinking about. And then we're also looking at policy discussions with the federal government around how can we support Canadians, middle-income Canadians to be able to access financial planning more readily. And are there tax strategies or tax credits? Or the way we can encourage people, the same way as we had a fitness credit, how do we encourage people to invest in their financial well-being as well as their physical well-being?
Carissa: If I look at, specifically to the financial access, I look at the quote that you have in the report, and it's, I quote, ‘I'm just like, I can't. I don't understand it. It's too intimidating to have someone else do it, for me, is really expensive.’ So I think within that quote, and then there's another quote on the same page, he said, ‘I used to spend a lot of time creating my own financial plan. But lately, I've been getting busy with my work so I hired a financial planner to take over that role.’
So I think what you're saying here, and where there's a big opportunity, and I've been in the business for 20 years. I am a Certified Financial Planner very proudly and I practice. It's interesting, over a few decades, there's still a big opportunity to create that awareness and to put it out there to the Canadian public that it is accessible, and help and provide that conduit to be able to achieve that.
Specifically for those listening, maybe those that haven't engaged in a pipe financial professional, as of yet. Maybe they’ve had some sort of help, but not like the full, maybe robust experience or that relationship or even starting to build that relationship. How can a financial planner help? How can they help build financial resilience?
Tashia: I think it's somebody to help you build the plan. And a financial planning relationship is a very trusted relationship. It's not always easy to go and speak to someone about your financial situation, about your family situation, any sensitivities that might be there. But to me, it's someone who can, you can go in and you can speak with. You can tell them what your goals and aspirations are, which may be different than your next-door neighbour, or your sister, or something like that. You may want to retire at a different age, you may have children if you want to make sure you are taken care of. Everybody's situation is unique.
And I think the real benefit of working with a financial planner is they acknowledge that. They recognize. They're going to build a plan that works for you. It's not a generic out-of-the-box, kind of exercise. It's very personal. And I think there's where the benefit is for Canadians because if it's customized, it’s personal to you, and you have somebody to help you coach you through the implementation of that plan, that's the real value of financial planning.
If that coach is the person who can work with you. I refer to that individual as your quarterback. They’re the person that you can work with, who could help you achieve, holistically all the various elements you need to look at. Whether that's insurance, whether that's estate planning, tax, retirement planning investments. They can look across and sort of say, how do all these pieces fit together to ultimately help you achieve your objectives, and what's important to you, as an individual.
Carissa: Yeah. And I think too, it's a journey so that everything that you mentioned is such an important component of a relationship with a financial planner and the benefit of working with one. But I think, too all of those things happen throughout time and throughout that relationship. And the one pretty impactful thing that you said is implementing your plan. So plan is great. A financial plan is great. But it's implementing putting it to work. And that's where your financial planner can help. Keeping you on track, igniting that plan, and then helping you move and mould it throughout life's journey and throughout financial journeys because it does change.
So I wanted to talk a little bit about, so elevating the profession is one of the key fundamentals and focus for you. And I'm so thrilled to see that as one of the fundamental components. But if we think about the professionals that we have around us, there seems to be a universal understanding of the need to work with some professionals like an accountant or a lawyer. And for someone like yourself that has worked across the financial services industry with such breadth and depth of experience. Where do you see a financial planner fits into this team of trusted professionals that Canadians should have around their table?
Tashia: You know, the reality of it is even a CFP professional like yourself is not going to know in detail every complex tax situation, every complex estate situation, every complex situation, any number of issues that might arise. So from my perspective, I think, what you see is a financial planner has holistically the ability to understand all those various moving pieces that become part of your plan. But every so often, you're going to need to reach out to someone maybe who's got a deeper expertise in a particular area.
So for example, let's think about someone who maybe is doing some complex family transitioning of a business. At that point in time, you may talk to your financial planner, and you may say to your planner, ‘Look, it's really important that I make and find a way to transition my business over to my children. This is the way I'd like to structure it.’ And then your financial planner can work with a tax professional, whether it's a tax lawyer or an accountant, to be able to help you develop a structure that will facilitate that transition.
So to me, my experience has been, and I've been working with a planner now for a long time, that they're my first point of contact, and they look holistically across all of my affairs, to make sure all the pieces are being managed appropriately. And then like any professional, they go out and they seek the expertise where needed.
I think that's one of the things about being a professional. If you're a lawyer, you don't know every answer, there are times when you may have to reach out and talk to an accountant, for example. If you're an accountant, there are times you may have to reach out and talk to an investment dealer. Any of these professions, that's one of the hallmarks of being a professional is sort of knowing when you need to be able to reach out and bring in expertise. And that is the role that I think a financial planner play is being that quarterback, helping you develop the plan, but also knowing when they need to reach out and connect you with other professionals.
Carissa: Absolutely great example. And it fits, like you said, to all professionals is knowing when to where to pull those individuals in and those professionals in.
So Tashia, thank you so much for being with me today for this really robust and great conversation. I truly enjoyed it.
Tashia: Thank you so much for the opportunity. It was wonderful Carissa and as always, I always really enjoy our conversation. So thank you.
Carissa: Yeah, you're truly leading the charge, you and your team. Elevating the mindset of Canadians. And you've said it like financial planning and professional advice, it plays its role in our overall well-being. And working with a financial professional just as you stated definitely has a positive impact on overall financial resilience. And from someone that has dedicated their career to the profession of advice and who has proudly held the certified financial planners' designation, as I mentioned for some time now, I absolutely love the work that you're doing and the attention you’re bringing to something that is truly fundamental. Again, thank you so much, Tashia, I'd love to have you back on a future podcast.
Tashia: Anytime Carissa. I’m looking forward to it.
Carissa: So our relationship with money is extremely important and it influences many things in our lives from our health, our satisfaction with our work, and our connections with others. This year, Canadians are paying even closer attention to their finances. Our CIBC financial priorities poll found that the top financial goals for this year are paying down and eliminating debt, keeping cash flow and expenses in check and growing wealth for the future. These are three important factors in the journey to financial resilience.
A few parting considerations for your personal journey to financial resilience. In order for you to feel confident, you must understand your financial situation. Have a plan that is crafted with your financial goals in mind. And as Tashia so eloquently messaged, work with a financial professional, they are there to be your guide your coach, everything from helping you prioritize your goals to showing you the art of the possible when it comes to financial freedom. Thank you for tuning into this episode of Smart Advice to make sure you never miss an episode, subscribe or follow on your favourite podcast platform and visit us for more advice at cibc.com/smartadvice.
FP Canada operates in all provinces except Quebec. However, FP Canada has a strategic partnership with the Institut Québécois de Planification Financière, also known as IQPF, which is the only body in Quebec authorized to confer financial planning diplomas. For more information please visit iqpf.org