Debt survey says: WAKE UP!!!

By Stephanie Holmes-Winton | March 23, 2010 | Last updated on September 21, 2023
4 min read

Last month I received an email from Steven Lamb of asking if I’d make a few comments on a survey conducted by RBC. You may have read the article based on the findings of that research.

I love interesting findings. Especially surveys that discover curious patterns about what we and our clients think will happen in the future versus what actually does, particularly when the subject is debt.

The most important section of the survey to me was when Canadians of different age groups were asked at what age they thought they would be debt free. I found the results to be ammunition for my professional mission to get advisors to start working with client debt. Why? Because each age group felt they would be out of debt far sooner than they actually were, and when the next age group was asked they would push out the time horizon yet again. Canadians between the ages of 18 and 34 thought they would be debt free by 43 and those aged 35 to 54 surmised they would have it all paid off by 59. The most senior group, those over the age of 55, expected to be out of debt by 66. And far too many advisors, I might point out, think clients in this age group are already debt free, or nearly at least.

Now, what does this tell us? What it tells me is that debt affects all age groups and we shouldn’t assume a client’s age is a guarantee to their household debt levels.

Some of the professionals who are supposed to guide us on what we should and shouldn’t be concerned about when it comes to our clients and the general state of the economy are letting advisors down. Client liabilities should be part of our regular planning.

Recently, I was listening in on a conference call where a very popular economist stated that advisors need not worry about personal debt levels in Canada as he projected only 5% of those in debt were likely to fall into default if interest rates were to rise, say, 3% or 4%.

Now, what message does that send you? In my mind, the intention was likely “Don’t panic”. However, I think the message may have been received as “Don’t worry, it’s not that bad, you don’t have to take action”. That 5% who are at great risk to default are not the ones you need to worry about. And frankly, worrying is a waste of energy.

What you must do is take action. You see, the economist is right. You shouldn’t worry about that 5%. Where he fell short was on warning us about the other 95% who are in debt and may be affected by rising interest rates, not to the extent of defaulting, but enough to start reducing investment contributions or start to draw on savings early. Those 95% who could be calling you to cancel policies because their debt repayment increases have caused them to cut other costs. Those 95% do require our concern and our attention.

Clients that need our help in this area are not delinquents. They don’t dress a certain way or have a funny smell. You can’t spot them on the street or even tell from their investment statements or T4s. They are professionals – lawyers, doctors, executives and CEOs – and I have had at least one of each in my office this week. They have good incomes and nice homes. They drive nice cars and they make good clients.

When you help them really understand their money and manage cash flow and debt, you become different than any advisor they’ve worked with. You become the person who looked at them as a whole. The one who actually listened to their financial concerns and gave them more than just a product or two to choose from. You become their real financial advisor. There is no one else “in their pockets”, so to speak. They don’t keep accounts from you or deal with you for only insurance or for only investments. There is no reason to use another advisor when they’ve shared everything with you. And this massive level of what I call “rapid trust” a client gets from knowing you really understand their finances converts your average everyday client into a walking testimonial for how you’ve changed their financial reality.

Don’t miss out on the boost you could give to your practice by working with client debt. Don’t lose a single client by leaving them with the need to talk to someone else about these matters because you didn’t. Start asking questions about debt and listen, listen, listen.

There is gold for you and your clients buried on the other side of the balance sheet. Don’t wait another day to start digging for it.

Stephanie Holmes-Winton

Stephanie Holmes-Winton is a Halifax based financial services educator/speaker who helps advisors find the money to help their clients fund their financial plans. She is the author of Defusing The Debt Bomb & $pent. Stephanie is also the founder and board chair of the Certified Cash Flow Specialist™ designation program. You can reach Stephanie at or