Six ways advisors can build Canadians’ financial confidence in 2025 and beyond

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While most Canadians believe the economy has stabilized after years of volatility, concerns remain about what 2025 will bring. And understandably so.

Political uncertainty (north and south of the border), higher interest rates and the rising cost of living have contributed to a general feeling of unease among Canadians.

That’s according to the seventh annual IG Wealth Management Financial Confidence Index, conducted with Ipsos Canada. The index revealed that Canadians’ trust in the economy remains weak, with the majority agreeing the country’s economic conditions “remain poor” and feeling that authorities don’t have the situation under control.

Canadians’ overall level of financial confidence stands at 50 points, consistent with 2022 and 2023. However, looking ahead to 2025, there’s much apprehension about what the future could hold around a range of issues, including the political situation in Canada and the U.S., job security, being able to maintain their current standard of living, rising food prices and housing costs.

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This is a significant opportunity for the wealth management industry to step up and be there for clients by working with them to build financial confidence and navigate the year ahead with a degree of optimism and certainty. Advisors can and should play an important role. So, what can you do? Here are six ways to make a difference.

1. Set expectations early

Inflation has normalized in most areas, recession worries are easing and central banks continue to lower interest rates.

For clients, the trend for growth appears to be positive heading into 2025. However, that’s not to say there won’t be challenges in the Canadian economy, especially in the aftermath of the U.S. election. The potential for trade, taxation and regulatory policy shifts between the two countries invites both opportunities and uncertainties for corporate profits and sector performance.

Given all the dynamics at play, it’s critical to connect with clients early in the year to provide a narrative for what to expect in the year ahead, assure them you’ll be there for them, help them understand that change is the one constant when it comes to the markets, and that you’ll work with them closely to navigate what may come.

2. Stick with the (financial) plan

Even during turbulent times, such as potential tariffs from Canada’s most important trading partner, advisors need to encourage clients to stay committed to their long-term financial plans. While it can be stressful for clients when market conditions are in flux, sticking to their financial plan can help prevent emotional decisions that could harm their long-term financial goals.

3. Communicate regularly

At a time when many Canadians are feeling uneasy about their financial futures, it’s more important than ever for advisors to keep clients informed on a regular basis and maintain open lines of communication.

To develop a lasting relationship based on trust, advisors should also be transparent about market conditions – whether they’re good or bad – and explain how they might affect the client’s investments.

4. Champion diversification

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Investing trends come and go, but diversification is always in style. Considering the economic forecast for 2025, advisors should encourage diversification across asset classes, geographies, styles and sizes to manage risk and reduce the impact of a market downturn.

5. Rebalance portfolios

Advisors should be ready to sit down with clients periodically and review their portfolios to prepare them for potential market volatility. By scheduling regular check-ins, advisors can make small adjustments to clients’ portfolios to manage volatility.

That involves selling overperforming assets and buying underperforming ones to keep the portfolio aligned with the client’s risk tolerance in this challenging yet potentially fertile investing environment.

6. Educate and support

Educating clients about market trends and investment principles can empower them to make informed decisions and feel more confident during volatile periods. Share timely, client-friendly market reports and other content with them.

Regardless of what the future holds, the wealth management industry plays a critical role in helping Canadians feel financially prepared and confident for whatever comes their way.

An integrated financial plan that encompasses all aspects of a client’s financial picture will ensure they find more opportunities and success in 2025 and beyond.

Damon Murchison is president and chief executive officer of IG Wealth Management in Winnipeg.