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Bank Survey Reveals only 16% of Canadians Polled Achieved their 2017 Financial Goal... and It's Partly Our Fault.

There were a few eye-opening gems in a recent CIBC Survey (link) that checked-in with Canadians on their financial priorities, their opinion on how they were progressing on their goals and what kind of shape they felt they were in for retirement. The data points of particular note for me were:

  • More than three-quarters (79 per cent) of Canadians aged 35 to 54 are worried about not having enough money to retire when they want to.
  • Only 16 percent of respondents stated they actually achieved their top 2017 financial goal.
  • 85 percent of those asked agreed they need to save more money, but 64 per cent aren’t making it a priority.

What do they give as the reasons for this disconnect?

  • not earning enough income (46 per cent);
  • getting derailed by unexpected expenses (29 per cent);
  • and struggling to pay everyday expenses (24 per cent).

The good news in all of this data is that it seems Canadian's desire to take practical action to improve their situations is on the rise as 23 percent of those polled plan to prioritize savings by setting up automatic transfers into a savings or investment account. This is more than twice the number compare to those that said the same thing for last year's survey.

So what's our part in this? Hearing that the top priority for those asked was paying down their debt tells me that many people are 'going it alone' regarding strategies for their financial success. In a lot of cases this is a reactive and short-term approach. They think "What hurts the most now, and what can I start doing that won't immediately make me feel like I'm in over my head?"

For the many of you with valuable Financial Planning skills, it's well understood that an effective strategy needs to include both short-term (debt repayment) and long-term (retirement savings) components.

These clients are engaging in what they think they should be doing to be successful. If we don't engage them in a process to understand their frustrations in not addressing those long-term goals, we will continue to share part of the blame for their failure to achieve those goals. Every time we miss an opportunity to have quality conversations with someone on how they are feeling about these important financial questions, we step further away from our desire position as trusted advisors.

A few approaches we coach people to that will give you a better chance to hear more than just what hurts the most at this very moment:

  • Expand the focus to include long term considerations - "Perfect, that gives me a good picture of the priority for you in the short-term, and I'll make sure you get the info you need to help with that concern. I always like to make sure that the advice I give on short-term goals doesn't interfere with your ability to achieve your long-term goals. What are some of your long-term priorities, like when you hope to be able to stop working and what you see yourself doing in retirement?..... How do you feel about your progress towards your those objectives?"
  • Providing more value beyond the transactional annual contribution - "Ok great, that's what we need to make sure you get this year's contribution in place to help out with the tax return. We'll get that taken care of for you. What about your overall strategy though?" then quickly ask:"Are you feeling confident that you're on track to be able to start enjoying your retirement at the age you hoped?"

Typically you're not going to be able jump into comprehensive discovery interviews on these long-term goals in these initial meetings for the short-term objectives, so remember to avoid rushing to offering a solution prematurely and instead use a practiced Transition that gets permission to move to the best next step in the process.

The numbers from this poll show us that people today do want to get going on being more successful for their retirement savings. So that means it's time for us to make the effort to engage in ways that makes it easy for them to benefit from your advice and guidance.