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Secrets of a financial planner

by | Oct 30, 2014 | SELF-PUBLISHED

Good planning relieves stress, promotes overall well-being

This is a challenging time for building your wealth and saving for retirement. A new study conducted by Leger Research for the Financial Planning Standards Council (FPSC) noted that money is the number-one source of stress for Canadians, with almost half of respondents at times feeling embarrassed about their lack of control over finances and losing sleep as a result of financial worries. The toll on Canadians’ health and well-being is measurable, according to Health Canada. Yet research has also shown that those who engage in financial planning report significantly greater peace of mind, are on track to achieve their life goals, and enjoy elevated levels of overall contentment in their lives. But what does “financial planning” actually mean?

How to meet the wealth challenge

You’ll often see a plain-vanilla general definition: “Arranging your financial affairs in a way that enables you to live well now while saving for a secure retirement.” That’s all well and good, but it doesn’t really tell you much about what really goes into financial planning and why it’s so important. That’s why, with my new clients, I pose a series of questions that help get at the crux of the matter:

  • How much money do I need to be saving each year?
  • What rate of return do I need to meet my financial objectives?
  • How much risk am I willing to accept?
  • How can I be certain I won’t outlive my money?
  • How do I maintain my standard of living over 30 years?
  • How can I draw an income and grow my money at the same time?
  • How can I protect myself from a significant market decline?

My solution to the wealth challenge is to help clients with a planning program that I call the Castlemark Wealth Paradigm.

Secrets of a financial planner

So how do you go about achieving that goal of “arranging your financial affairs in a way that enables you to live well now while saving for a secure retirement”? The financial planning process can be broken down into five key components. There’s more to it, of course – a lot more – but at a minimum, here’s what a financial planner should be offering you:

1. The financial plan. I work with clients to identify financial goals and objectives, and the rate of return they expect from their investment portfolio. This is not a number I pull out of a hat. Through in-depth discussion and meetings, I work with clients to establish realistic expectations given their current financial situation, the state of the economy, and financial markets. I’ll look at the client’s entire financial picture including, income, expenses, debts, real estate, all registered (RRSPs, TFSAs, RESPs, etc.) and non-registered (brokerage and other) accounts, and anything else that might have a bearing on the client’s wealth outlook.

2. Risk profile. In personal discussions, and using my proprietary risk profile worksheet, I help clients quantify their risk comfort zone. How big a drop in markets over how long a period can they realistically withstand? How comfortable are they with market volatility? And so on.

3. Investment policy statement. I then combine the completed financial plan with the risk profile to develop a personal investment policy statement. This will specify a portfolio asset allocation most suitable for the client’s financial objectives given their risk comfort zone, and a corresponding investment mandate.

4. A customized investment portfolio. The client’s funds are invested according to the investment mandate identified in the investment policy statement. The independent investment managers I use continually monitor portfolios to ensure optimal performance in the mandate, with regular reports on performance. I’ll review portfolios regularly, and make any necessary adjustments to ensure holdings perform within the parameters governed by your investment mandate.

5. Insurance review and recommendations. Part of the financial planning process is to assess insurance coverage and make sure it’s meeting current needs in three basic areas: life insurance, disability insurance, and critical illness insurance.

Learning more

The 6th annual Financial Planning Week takes place from November 16-22, with the goal of raising awareness of financial planning as fundamental to the well-being of Canadians. In conjunction with this, from November 1-17, Certified Financial Planner (CFP) professionals will organize and host information sessions in communities across Canada to raise Canadians’ awareness about the importance of financial planning and educate them on how to get started.

This year, Jane Rooney, Canada’s first Financial Literacy Leader, has joined Financial Planning Standards Council (FPSC) President and CEO Cary List in challenging CFP professionals to inform and educate 2,020 Canadians through the 2020 Community Challenge, which will take place in communities across Canada.

Visit the FPSC website ( for a number of online resources to learn more about financial planning and how to get started. Financial Planning For Canadians includes information about how to choose a financial planner, questions to ask your financial planner, and how the financial planning process works. The Find a Planner or Certificant tool will help find a qualified individual by geographical area, language, area of specialty or type of client.

More information about Financial Planning Week and the 2020 Community Challenge is at

© 2014 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited.

© 2022 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice.

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