Working with a financial planner boosts household resilience: study

Canadians who work with financial planners have higher levels of financial resilience than those who don’t, suggests research commissioned by FP Canada and its sister organization the Institut québécois de planification financière.

The study was conducted by the Financial Resilience Institute, a non-profit organization that aims to improve financial well-being, and based on 5,000 Canadian respondents, including 1,340 who worked with financial planners. Households that worked with planners had a mean financial resilience score of nearly 60 compared to about 48 for those that didn’t work with planners.

“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,” Eloise Duncan, CEO and founder of the Financial Resilience Institute, said in a release.

Duncan created the institute’s financial resilience index model used in the study. The index defines household financial resilience as a household’s ability to get through financial hardship, stressors and shocks as a result of unplanned life events. Resilience is measured across nine indicators three times annually, and the index has a pre-pandemic baseline from February 2020.

Across the indicators, those working with financial planners showed a significantly higher score related to having liquid savings buffers (71 on the index versus 56 for those not working with planners), self-reported credit scores (77 versus 61) and confidence in the ability to meet short-term savings goals (62 versus 48).

About 48% of those without financial planners rated their financial well-being as “good” or “excellent,” while significantly more Canadians (72%) with financial planners reported having those higher levels of financial well-being.

Among the study’s other findings was that people working with financial planners and adhering to their financial plans had lower levels of financial stress.

The study was conducted from Feb. 6 to Feb. 21, using a representative sample of the Canadian population.

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