The Financial Planning Standards Council (FPSC) and the Institut Québécois de planification financière (IQPF) have updated and released their Projection Assumption Guidelines for financial planners across the country.

The Guidelines were developed in 2015 by a committee of actuarial and financial planning professionals and they have since been updated annually. Their purpose is to help financial planners make long-term financial projections free of biases by drawing information from a variety of sources available to the public.

Changes include reducing the Fixed Income guideline to take into account the appreciation in historical bond prices that cannot be explained by changes in interest rates. It also updates calculations based on the most recent Actuarial Report of the Canada Pension Plan and the Quebec Pension Plan Actuarial Valuation.

Foreign Developed and Emerging Market Equities

In addition, the S&P7TSX Index will be replaced with the MSCI EAFE Index in the calculations of the guideline for Foreign Developed and Emerging Market Equities.

“Updates to the Projection Assumption Guidelines provide financial planners with the current information to best help clients in meeting their important life goals,” says William Jack, CFP, an actuary and member of the FPSC Standards Panel. “The ongoing evolution of the Guidelines helps planners provide appropriate advice and enhances the credibility of financial planning professionals.”

The Projection Assumption Guidelines, in effect since July 31, 2017, are as follows:

  Inflation rate


  Return rates

  Short term


  Fixed income


  Canadian equities


  Foreign developed market equities


  Emerging market equities


  YMPE or MPE growth rate


  Borrowing rate


To learn more, consult the updated guidelines on the FPSC’s website.