April 13, 2022

Our assumptions for financial planning

2021 FP Canada's rate of return guidelines



(Originally posted in 2021)

Financial models require realistic assumptions. We use FP Canada's rate of return guidelines that are based on actuarial data and combine them with our proprietary assumption engine. The result is an accurate portrayal of your financial health brought to life almost instantaneously.

We take tax calculations seriously and use Canadian software to account for the impact of paying tax personally, corporately, and within a trust.

Who comes up with these numbers?

In Canada, the leading body that oversees the financial planning industry is known as FP Canada. Every year, FP Canada provides the country’s Certified Financial Planning professionals with a list of assumptions and guidelines appropriate for use when making long-term financial projections. These assumptions act as the foundation upon which financial plans are built. In order to determine a client’s retirement income needs, future tax burden, or children’s education funding needs, a number of assumptions surrounding interest rates, inflation, and investment returns need to be used. This is where the FP Canada guidelines become imperative.

What backs up these numbers?

These guidelines are not the product of one person’s opinion; they are the product of quantitative research and unbiased third-party data. FP Canada uses a cross-section of sources, including both the Canada Pension Plan and the Quebec Pension Plan’s actuarial reports, to ensure that the information is independent and free from bias. Having access to a very accurate set of assumptions and guidelines is key to producing high-quality financial plans.

What makes a Camber plan unique?

The standard approach taken by the industry is to use data models that only consider a few factors and convert them into highly complicated reports that provide Canadians with minimal insights into their finances.

At Camber, we take these numbers even further as we incorporate them into our assumption engine. We understand that complexity impedes understanding and have found a way to turn financial planning on its head. By pairing the data provided by FP Canada with the information that can be found within Statistics Canada’s Survey of Household Spending, our assumption engine produces a very accurate and detailed set of assumption guidelines. We are then able to take these highly sophisticated data models and use the information they provide to produce a unique and easy-to-understand Camber Dashboard for each client. Our dashboards allow our clients to gain better insights into their finances while also being able to test different potential scenarios in our virtual environment.

We welcome you to come and test drive the difference that detailed data can make in your financial plan today.