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Personal Planning5 Financial Trends To Plan For In 2022


This article was reviewed by Chris Singer, CFP®.

It’s been—shall we say—a turbulent couple of years. The pandemic has transformed so much of our day-to-day lives, and collectively, our society has had to shift with it. 

For people in retirement, they’ve lost two years of critical “fun time” in their golden years, many of them having to press pause on their bucket lists.

That delay can be hard for people to recover from mentally—not to mention all of the other challenges that living through a pandemic has brought. 

Here are some of the top trends we’ve observed over the past year that will continue to have an impact going forward, and what that means for your financial planning in 2022.

Growth of digital financial services

Even before the pandemic, financial institutions were transitioning to a digital world.

For the past ten years, we’ve seen significant investments from banks, credit unions and fintechs to leverage digital technology and offer more financial services online: from personal finance management (PFM) tools to virtual financial planning, and even AI-driven services like robo-advisors and chatbots.

This is known as the digital branch.

When the pandemic hit, the digital branch became a necessity, as people could no longer walk into a physical location to get their day-to-day banking done. 

Even with in-person services opening back up, we expect to see a significantly higher percentage of people using digital financial services than they did pre-2020.

One of the improvements in technology that we’re a big fan of is the ability to use DocuSign® to sign paperwork virtually. Not only does it make it easier on our clients, it is also kind to the environment by not wasting ink and paper.

Our concern with some of the developments is the increase in automation. This makes the financial advice people receive feel more like getting a burger at McDonald’s—very processed and cookie-cooker. The best financial planning will always be based on personal relationships and human connection.

Sports betting-style investing

With the global shutdown, we saw another phenomenon: people had money to burn. It’s not just their travel plans that were cancelled, but concerts, sporting events, and even nights out on the town. The budget they set aside for leisure activities didn’t have many places to go. 

And so, they turned to online “investing.” Attracted to the stock market, we’ve noticed a significant increase of young people who have started spending their leisure funds buying and selling stocks. 

There’s no strategy to this approach, just hopping on trending stocks. They make as much as they lose, but they’re not in it for the capital gains. It’s all about the thrill.

This is no different than sports betting.

There’s a lot of noise out in the world right now, especially in the investment industry. Various blogs, social media feeds and other sources are providing the general public with both real and fake investment news. While we may have access to more information than ever, it’s becoming harder to make sense of that
information and sift good advice from the noise.

Increased adoption of cryptocurrency

Cryptocurrency is decentralized digital money, based on blockchain technology.

For better or for worse, cryptocurrency is here to stay. In the last year, we’ve seen more and more companies accepting bitcoin and other forms of crypto as valid payment, such as Microsoft, Paypal, and Home Depot. 

In 2020, Wealthsimple launched its Wealthsimple Crypto platform, which was the first (and currently only) regulated crypto exchange in Canada, allowing users to buy and sell a variety of cryptocurrencies, such as Bitcoin, Ethereum, Dogecoin and more. 

We expect to see more competitors enter this new industry. We also anticipate that there will be an increase in regulation as the sector has, for the most part, gone unchecked.

Low interest rate environment

These days, interest rates are lower than ever. While that may be great if you’re looking to borrow, the flip side is that it’s not great for growing your money, with high interest savings accounts at banks paying only around 0.25%. There’s just not a lot that you can earn right now on money that you may need in the next 1-3 years.

While this has created an opportunity for some financial institutions to offer promotional accounts at a higher rate, like EQ Bank and Tangerine, shopping around, chasing the highest interest rate isn’t always in your best interest.

Sometimes the best solution is using your excess cash first, to make sure you are not paying bank fees, as these may be a higher amount than the interest you will be paid in return.

Expect market volatility

As governments reduce stimulus packages, we anticipate some short-term volatility in the markets in the coming year.

We’ll also watch to see what happens with interest rates and inflation. We expect to see interest rates increase over the next few years, as they are at all time lows. The next big question for inflation then is, will we see a short-term increase of costs or a long-term trend? 

This uncertainty often makes investors panic and can lead to more dramatic highs and lows.

It’s important to review your financial plan, and make sure that you have the correct mix of assets in your portfolios, so that you are able to weather the turbulence.

Retirement is an incredibly rewarding journey. But it’s important to have an expert in your corner that can help you sift through the mountains of information that we’re all being bombarded with on a daily basis. 

Don’t have a financial planner? We’ve put together a retirement planning worksheet to help you identify what you should focus on, to create a retirement plan that will give you peace of mind. 

This publication is for informational purposes only and shall not be construed to constitute any form of investment advice. The views expressed are those of the author and may not necessarily be those of ACPI. Opinions expressed are as of the date of this publication and are subject to change without notice and information has been compiled from sources believed to be reliable. This publication has been prepared for general circulation and without regard to the individual financial circumstances and objectives of persons who receive it. You should not act or rely on the information without seeking the advice of the appropriate professional. Investment products are provided by ACPI and include, but are not limited to, mutual funds, stocks, and bonds. Non-securities related business includes, without limitation, fee-based financial planning services; estate and tax planning; tax return preparation services; advising in or selling any type of insurance product; any type of mortgage service. Accordingly, ACPI is not providing and does not supervise any of the above noted activities and you should not rely on ACPI for any review of any non-securities services provided by Jay Brecknell.