After a long period of low interest rates and rising asset prices (housing and equities), you may feel that having a financial plan is not that important. After all, everything is going great! But recent market turbulence reminds us that markets are volatile and having a solid financial plan that works for you in the up— as well as down— markets is key.

According to Jason Heath, a Markham-based certified financial planner with Objective Financial Partners, “when things are good, people get complacent. Stocks and real estate have risen quite a bit in the past 10 years. For young people who haven’t been through a stock or real estate market downturn, it may seem like these assets just go up. We also haven’t had a recession in Canada since 2009 – almost 10 years ago. Frankly, we’ve had a good decade for the stock market, real estate prices, and economic growth.”

But just because the markets have generally been increasing, that doesn’t mean you’ll want to get caught projecting unrealistic numbers when creating your financial plan. Doing so can set you up for far less than you’d hoped in the long-term.

Monique Madan, a Toronto-based certified financial planner and Head, Financial Life Strategies at Quintessence Wealth uses the guidelines set forth by the Financial Planning Standards Council (FPSC) when projecting rates of return for her clients. “The guidelines are incredibly conservative, deeply conservative in comparison to bull markets. So, if anything, we have been planning all along for a “soft” market. I don’t use prevailing rates. For equities and for my financial plans, the highest rate of return that I’d use— and that’s for a 100% equity portfolio— would be about 5.15, after fees.”

Heath, warns that, “there’s a behavioural economic theory called the “wealth effect” that suggests when people feel wealthy – for example, if their stocks or real estate have risen in value – they “act” wealthier by spending more than they should. And, when stocks or real estate fall, or some other economic shock occurs, these people may get off track. This may be most pertinent in hot real estate markets, like Vancouver and Toronto, where buyers are willing to assume more debt. If real estate prices fall, interest rates rise, or a recession or job loss occur, they may regret succumbing to the wealth effect.”

If you’re managing your own finances, be cautious with your projections. “Whether you’re using financial planning software or the services of an investment advisor, ensure that you adhere to the FPFC guideline,” says Madan.

Heath cautions against trying to time the market because doing so means you “need to be right twice: you need to pick the right time to sell and the right time to buy. Financial planning requires a long-run approach, and as humans, we’re fallible. We make mistakes. But we should try to be realistic and conservative in our expectations, whether on our own or with a professional.”

When shopping for professional financial services, ask right questions. Get started by reviewing these articles and videos: To find a certified financial planner in your area, visit

Kelley Keehn is a financial literacy advocate who has been on a mission to "Make Canadians Feel Good About Money." She’s a best-selling author of 10 books and her newest book, Talk Money To Me, published by Simon and Schuster, is in bookstores across Canada, as well as online with Amazon and Indigo. Kelley served on the National Steering Committee on Financial Literacy, serves on the board of Money Mentors and the Canadian Foundation for Economic Education, has been appointed to the Financial Consumer Agency of Canada’s Consumer Protection Advisory Committee and the Ontario Security Commission’s Senior Expert Advisory Committee, and, is the Consumer Advocate for the FP Canada. You can learn more about Kelley at her website: