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As inflation pressures continue to weigh heavily on the shoulders of people living in Canada, the need to be more intentional about planning your finances is a glaring reality. A comprehensive approach to financial planning is critical to building financial resilience. Canadians are juggling affordability concerns across the spectrum of life stages. With housing, some are thinking about saving for a new home, while others are facing increases in their mortgage payments. Many families are planning for a new child or are taking on additional caregiving responsibilities for aging parents or relatives. These are just some of the immediate factors to balance alongside a realistic long-term view for planning a comfortable retirement. The mounting financial stressors have many turning to digital solutions featuring AI technology to potentially find lower-cost or more accessible solutions that can help with financial planning considerations.

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Christopher Dewdney, Principal of Dewdney & Co, FP Canada Board of Directors, and Chair of the Fintellect InitiativeSupplied

Though everyone’s circumstances are unique, I frequently hear one common concern in client conversations. Canadians don’t feel they have the financial resilience they once had to withstand an unexpected life crisis. The 2023 FP Canada™ Financial Stress Index revealed that 44 per cent of Canadians feel less hopeful about their financial futures. As a CERTIFIED FINANCIAL PLANNER® professional, clients also tell me that finances are the biggest source of their stress, even more than health and work combined – a finding that was also uncovered in the 2023 Financial Stress Index.

For these reasons, it’s more important than ever that they have access to financial planning resources. For those looking for quicker fixes, digital tools can certainly be appealing. Like most people, if I’m up at night thinking about a complex problem, it’s easy to pick up my phone and look for fast answers using Google or the latest AI-supported app.

While the opportunities stemming from new fintech can be exciting, it’s imperative that we understand the risks behind AI-driven financial advice. A financial planning professional can help connect the dots by understanding clients’ specific goals and needs and, most importantly, acting in their best interests. Last year, FP Canada’s Financial Stress Index reported that money is not a source of stress for 75 per cent of Canadians who work with a CFP® professional or QUALIFIED ASSOCIATE FINANCIAL PLANNER™ professional.

Exploring the interest in AI and fintech in Canadian financial planning

As financial insecurity and low confidence in financial matters persist, the adoption of AI and fintech is on the rise, improving access to financial planning services. The convenience offered by AI and fintech in financial planning is encouraging as these technologies can provide quick access to information, budget automation and investment tools – making some areas of financial planning more accessible to more Canadians.

That said, we must advance with caution by recognizing the limitations of AI solutions and the need for human insights in financial planning. Relying solely on AI for financial guidance is akin to using online research for a medical diagnosis. Just as one would consult a medical professional for their health, CFP professionals and QAFP professionals provide a personalized, nuanced and human-centred approach to financial well-being.

Mitigating risk: The role of CFP professionals and QAFP professionals

While AI and fintech offer advantages, they come with inherent risks that can impact financial resilience.

One major risk is bias from digital algorithms that may feed into the AI tools that people use. Examples of algorithmic input can include a person’s search history or paid campaigns from financial companies, potentially leading to superficial or discriminatory outcomes. Other biases may come from a lack of diversity in the data that trains AI tools on how to generate recommendations. CFP professionals and QAFP professionals work with you to build and implement a personalized plan based on your unique, individual needs instead of generalized recommendations from data that applies to other people’s situations.

A lack of transparency around data collection and how the data is used in AI-driven fintech poses another risk. Human oversight is essential to prevent clients from being misled by companies leveraging AI to drive profits, sometimes at the expense of financial well-being. As part of the FP Canada Standards Council™ Standards of Professional Responsibility, CFP professionals and QAFP professionals must take steps to understand the methodologies underlying the technology, including the assumptions that go into the financial planning technology they use to make their recommendations. In addition, CFP professionals and QAFP professionals must validate the inputs and outputs generated for the client. A financial planning professional can critically evaluate inputs and considerations to ensure their client’s financial plan aligns with the person’s unique financial goals. A collaboration with more transparency helps build mutual trust and alignment with what financial resilience looks like for each client.

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Inadequate financial literacy is another risk associated with the automation of financial processes. An overreliance on AI technology will bypass the benefits of taking an active role in implementing financial plans and building resilience in your financial outlook. CFP professionals and QAFP professionals function as educators, equipping clients with the knowledge to implement their personalized financial plans. The financial planning community aims to empower Canadians to make informed decisions based on a comprehensive understanding of their personal financial circumstances.

Canadians should recognize technology as an enabler rather than a standalone solution when navigating the AI and fintech landscape in financial planning. While these tools provide efficiency and accessibility, individuals should be cautious of AI-created recommendations and balance them with the human intervention of a professional financial planner. CFP professionals and QAFP professionals are indispensable in explaining, interpreting, implementing, and augmenting personalized financial plans, ensuring a dynamic and resilient approach to financial well-being. As Canadians strive for financial resilience, a thoughtful combination of technology and human expertise remains vital.

Advertising feature produced by Randall Anthony Communications with FP Canada. The Globe’s editorial department was not involved.


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