Financial Planning for the Masses

As Canadians (gradually) put aside trust issues, fintech brands are shaking up the finance industry

Photo: Owen Winkelmolen, a financial planner and founder of PlanEasy

THE FIRST MONTH or two of a new year is when many people decide to get serious (or, more serious) about their personal finances. But without the right advice and tools, that commitment to trim expenses, spend smarter and invest wisely can be tough to maintain.

The good news is the fintech boom has put powerful financial knowledge and tools in the palm of your hand. But—and it’s a big but—all the disruptive technology in the world is only useful if you have financial goals and a plan established.

“The first step should always be to make a plan,” says Owen Winkelmolen, a financial planner and founder of PlanEasy, a company providing advice-only financial planning. “What are your goals? Why are these goals important to you? Once you figure out your goals the rest starts to fall into place. Budgeting, saving, paying off debt, investing—once you have a specific goal it becomes easier to get started.”

“We’re starting to see early fintech adopters become advocates for new fintech products, and this is driving faster and faster growth in the segment” —Owen Winkelmolen

There are plenty of timely reasons to reassess or launch a financial plan at the top of a year, says Winkelmolen. “There’s new TFSA contribution room available January 1, there’s the RRSP deadline at the end of February and then we have the tax deadline by the end of April. Throughout this time, we’re also getting year-end investment statements like T4s, T5s and T3s.”

But while there are many reasons to be looking at your finances early in the calendar year, there is no bad time to create a financial plan. And depending on where you are in life, there are times when Winkelmolen advises his clients that it’s even more important to take stock.

“Before large purchases, like buying a home, it’s helpful to create a plan, especially with post-house spending and saving planned out,” he says. “Before starting a family, it’s helpful to plan changes in income and expenses. There could be time off work, new one-time expenses, new on-­going expenses and new income sources like Employment Insurance and the Canada Child Benefit.

“In addition, the five to 10 years leading up to ­retirement are extremely important,” he continues. “A little bit of pre-planning will help ensure that you’re ready to draw down your assets in the best way possible and begin retirement with the knowledge that your financial plan can withstand even the worst-case scenario.”

If you’re starting or running a new venture, you’ll also have the dual ­pressures of your personal and business finances, so the more you can plan for various scenarios, the better off you’ll be. Plus, you can work with your planner to help identify the best digital tools for your needs—and there are certainly plenty to choose from.

But while people in some countries have been very quick to adopt fintech’s advances, Canadians have been slower to embrace new digital options, something Winkelmolen chalks up to trust.

“Money is a very personal topic and requires a lot of trust. It can take time to build trust with a client and for that client to become an advocate. We’re starting to see early fintech adopters become advocates for new fintech products, and this is driving faster and faster growth in the segment.”

As Canadian adoption rates catch up with the rest of the world, ­consumers will have their choice of a rapidly expanding list of options, including many homegrown platforms that offer an increasing selection of features and financial control.

“Early fintech products were focused on the transactional aspect of personal finances—automated investing, electronic banking, summarizing purchase and income transactions,” Winkelmolen explains. “The next wave of fintech products will use technology to make highly customized coaching and advice available to everyone, regardless of income or assets, and at a much lower cost.”

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