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Jun 1, 2020

Financial Planning: Why Are So Many Canadians Not Following Through?

by Kelley Keehn

Kelley KeehnThe traditional study of economics states that people are incredibly rational. When we make a decision, we collect all necessary data, weigh all the pros and cons, run a few calculations if necessary and soundly, unemotionally, decide on the best course of action; think Spock from Star Trek.

Yet, the growing field of behavioural economics is discovering that the robotic, rational side of our selves and our decision-making process can be deeply flawed. Or, that we’re simply human; think Homer Simson on a diet and then he sees doughnuts.

Why Is It That We Can Know What To Do, Yet Still Not Do It?

According to the 2007 Physicians’ Health Study, 40% of the 19,000 doctors were overweight and 23% were obese.1 While physicians are less likely than average Americans to be overweight or obese, they are not immune to obesogenic tendencies. If doctors can’t take their own advice, how do we?

For the past four years, I’ve been the Consumer Advocate for FP Canada, the non-profit organization that sets the standards for financial planners in our country. It’s been my role to help Canadians see the value of financial planning and to reach out for assistance from a qualified professional, like a Certified Financial Planner (CFP) or Qualified Associate Financial Planner (QAFP). Not nearly enough people are using a financial pro and as a result, are stressed about their finances, leaving money on the table in the form of tax deductions, grants and more. But for those who do reach out, have a financial plan created and a road map to their retirement designed, far too many are checking the box too quickly, and stopping there. Unfortunately, research has shown that many do not follow the advice professionals give them4. And those most in need of advice are also those least likely to follow it.

For those individuals, the question becomes, how do you follow through on your plan? And how does your financial pro ensure that you tick every box within the plan, not just the reward, but the action of getting the plan done.

To answer those questions, I reached out to David Lewis, Chief Client Officer with BEworks, a purpose-driven company whose goal is to transform society and the economy through scientific thinking. The BEworks team was engaged by FP Canada and the FP Canada Research Foundation to investigate the Implementation Gap.

Key Findings To Help You Mind The Gap

The BEworks team sought to answer the “implementation gap” question. Why do individuals that pursue and obtain financial plans and advice, then, not fully act (or at all) on that advice? And what would increase people’s chance for success? Let’s dig into their findings.

Intentions Are Poor Predictors Of Action

A good example of this, according to the BEwork’s team is the notion of “going green” or the Green Gap. “A recent survey shows 87% of Canadians say they are concerned about the environment and will shop with that concern in mind, but only 33% of Canadians buy green products. This bias boils down to the fact that when many people think about going green, they don’t want their efforts to be a drop in the bucket, so they think about doing “all or nothing”. For example, thinking about getting an electric vehicle, but then don’t, surmising it won’t make an impact anyway.”

Clients Acknowledge That There Is A Gap

BEworks conducted a study of 180 clients working with a financial planner to determine if the clients think there is a problem and, do they perceive a gap? They aimed to find out how much of the financial planner’s most recent recommendations they follow through on?

What they found was, indeed, there is a problem in most financial planning processes. Most clients are not following all the recommendations. They might be taking care of the simpler stuff like opening up an RESP or TFSA but stalling on the more complex issues like getting life insurance or making a Will.

The Say/Do Gap

Have you ever made a promise to yourself to do something important like get your annual check-up or dust out your Will to update it? You knew these things were important to your well-being, yet you kept finding yourself procrastinating? Well, rest assured, you’re not alone.

A study of the 2008 presidential primary campaign revealed a classic example of the “say/do gap” and how to combat our tendency to not follow through. The platform measured the impact of phone calls to encourage voter participation with three slightly different scripts. The first simply encouraged people they called to get out and vote. The second asked the voter to think about the scenario and question, “will you go and vote?” And the third, gave them encouragement, asked them if they’d vote but followed up with some specific details, such as, “when will you vote, what time will your vote, how will you get to the poling station”. It might not sound like much more effort for the caller or potential voter, but that extra step of committing to an action and then, visualizing the steps you’ll take, increased the likelihood of success dramatically2!

Licensing Effect

According to BEworks, “the licensing effect is the fact that prior decisions can boost and individual’s self-concept in a way that those previous decisions function as a license for future decision-making.

For example, in a research experiment, some participants were given the opportunity to appear charitable, by being asked to imagine that they had volunteered to spend three hours per week doing community service. The controlled participants were told nothing. They were then asked to choose between a luxury item (e.g. a pair of designer jeans) or a functional item (e.g. a vacuum cleaner) that cost the same but were told they needed both3.

Those in the charitable condition chose the luxury item more, and those in the control condition overwhelmingly chose the functional item. Amazingly, this temporary boost in their charitable self-concept gave these participants the license to choose a pleasurable item or something they needed.

Lewis from BEworks explains: “This can also happen with a financial plan. You’ve gone through the planning process, receive a clear plan that has your finances and goals presented in a reachable format and then feel rewarded. This good behaviour of seeking a planner and getting a plan can give you license. This effect can even occur for future good behaviour. For example, having the option of doing some good in the future can license you to do something more desirable in the present. The plan can license a person to not take action in this way as well.”

Steps To Your Success

If you don’t have a financial plan, then consider that as your first step. Once you and your planner have designed your road map, you’ll have to work together to ensure that step isn’t the big pat on the back to then forget it and stick it in your filing cabinet. You’ll both want to chunk out your action steps, pre-commit to a time and date when you’ll tackle them along with a course of follow-up. And if you’re a DIYer, adding your financial action steps to your Outlook or Google calendar with two-week reminders in advance is a great way to make sure you follow through on your commitments.

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 ten books including her latest, Talk Money To Me published by Simon and Schuster. She is the financial educator on The Marilyn Denis show and was the W Network host of Burn My Mortgage. 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:


  2. Nickerson, D. W., & Rogers, T. (2010). Do you have a voting plan? Implementation intentions, voter turnout, and organic plan making. Psychological Science, 21(2), 194-199.
  3. Khan, U., & Dhar, R. (2006). Licensing Effect in Consumer Choice. Journal of Marketing Research, 43(2), 259–266.
  4. Bhattacharya, U., Hackethal, A., Kaesler, S., Loos, B., & Meyer, S. (2012). Is unbiased financial advice to retail investors sufficient? Answers from a large field study. Review of Financial Studies, 25(4), 975-1032.