“No horse gets anywhere until he is harnessed. No stream or gas ever drives anything until it is confined. No Niagara is ever turned into light and power until it is channeled. And no life ever grows great until it is forced, dedicated, disciplined.” Harry Emerson Fosdick

What is financial planning?

Financial planning is more than budgeting, saving, or having the perfect investment strategy. Financial planning is a process that sets you on a course toward achievement of your personal financial goals, needs and priorities through the proper management of your financial affairs that include wealth & income protection/risk management, tax planning, building wealth/investment management, retirement pre-planning, retirement income planning, wealth transfer/estate planning and business succession if applicable. Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being than those who do limited planning or no planning at all. People with comprehensive plans say they feel more on track with their financial goals and retirement plans, have improved their ability to save, are more confident that they can deal with financial challenges in life, and feel better able to indulge in their discretionary spending goals.

Many Canadians are not planning their financial future because ‘blind spots’—things they don’t know how to deal with or avoid because they don’t understand—may be getting in the way of issues like understanding how much they need to save for retirement or even if full retirement is within their grasp.

In fact, almost half of respondents in a recent survey conducted by Leger for the FP Canada, indicated this was a significant blind spot for them, closely followed by their lack of clarity about their long-term financial goals. One in three identified with being so overwhelmed by the options they would “wait until I can figure it out.” The first step in creating any good plan is to have a clear understanding of what the goals and objectives are. For many people, the financial planning process is their first “go through” in terms of writing down their financial objectives. They may have some vague ideas and concepts, but they do not really know how those are achievable or if they are realistic. The financial plan aims to formalize that process and gives them some guidance in making those dreams become a reality.

So, you have the plan. Whose responsibility is it to implement it―not just now, but also in the future? The mutual responsibility of who does what should be clearly discussed at the very beginning of the planning relationship. Work with your planner to try and understand what they can manage for you themselves, and what services you may need to seek out with another financial professional. For example, your planner may not be able to provide tax advice, in which case it is important that we introduce an accountant or another financial professional into that relationship.

I am guessing that you do not do all this work with your planner and then just throw your plan into a drawer to be revisited ten years later. Not at all. Life changes, and your plan should change with it. I recommend that you review your plan regularly, especially if there’s a major life change―for example, if you go through something special like getting married or expanding your family, or if you go through a painful event, like a divorce or a death in the family. All of these are key trigger points for you to revisit the financial plan with your financial planner. Here is the thing. People are not robots. They are logical, but they are emotional too. We all want to do the right thing, but we also want to kick back and enjoy life. And even the most disciplined among us―who watch our spending, try to pay off debt and put money aside for a rainy day―usually have limited knowledge of personal finance.

How much, for instance, do you know about cash flow planning? Investment planning? Tax planning? Insurance planning? Retirement planning? Estate planning? Business planning? And so on.

This is why you need a plan and at minimum a CERTIFIED FINANCIAL PLANNER® professional to design it for you. Getting a plan done would be the best financial move you ever make. If you do not have a plan or it has been a while since you have reviewed it now is the time!

Dave Otto B.B.A. CFP®️ CLU®️ CH.F.C.®️ EPC™️

Founder and President, DO FINANCIAL


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