FP Canada™ and the Institute of Financial Planning jointly publish the 2025 Projection Assumption Guidelines for Financial Planners

Malaysian Reserve

23-04-2025

TORONTO and MONTRÉAL, April 23, 2025 /CNW/ - FP Canada and the Institute of Financial Planning, formerly the Institut québécois de planification financière, today announced the joint release of the 2025 Projection Assumption Guidelines and Addendum for professional financial planners across Canada.
The Projection Assumption Guidelines help financial planners make long-term projections that are free from bias for their clients. The Guidelines are established using a variety of trusted and publicly available external data sources, as well as results from a targeted survey.
'The Standards Panel thanks Ortec Finance as well as all other industry partners for their participation and support. We are also appreciative of the support from professors Dimson, Marsh, and Staunton in sharing their historic index data and allowing us to use this data when developing the 2025 Projection Assumption Guidelines,' says Julie Seberras, CFP®, MBA, FCSI and Chair of the FP Canada Standard Council™ Standards Panel.
Designed to look beyond the current day rate environment, the Guidelines are intended to be used when making long-term projections of 10 years or more. For shorter-term financial projections (less than 10 years), financial planners may use actual rates of return on fixed-term investments held to maturity and dividend yields on equities. When applying the Projection Assumption Guidelines to client situations, professional financial planners must always use their professional judgement and should document and clearly communicate the assumptions used for their clients. In times when markets or economic conditions are changing, it is particularly important to note the long-term nature of these projections.
The Projection Assumption Guidelines for 2025 are as follows:
Inflation rate
2.1 %
Return rates
Short-term
2.4 %
Fixed income
3.4 %
Canadian equities
6.6 %
U.S. equities
6.6 %
International developed-market equities
6.9 %
Emerging market equities
8.0 %
YMPE or MPE growth rate
3.1 %
Borrowing rate
4.4 %
New Considerations for 2025 The 2025 Projection Assumption Guidelines now include a separate assumption for U.S. equities. Prior to 2025, U.S. equities were included within foreign developed (now identified as 'International developed-market') equities. 'Including a separate assumption for U.S. equities reflects how the assumptions are used by professional financial planners in practice,' says Jeff J. Cormier BBA, CFP®, CFA®, and Chair of the Projection Assumption Guidelines Committee.
Prior to the 2025 guidelines, the historical data for emerging markets included data for the MSCI EAFE Index until 2000, an estimate from 2001 to 2006, and the MSCI Emerging Markets Index (net div., CAD) thereafter. This was due to a lack of available historical data for emerging markets. As of 2025, the Guidelines use the DMS Emerging Markets Index in CAD net of an estimate for foreign withholding tax until 1987, the MSCI Emerging Markets Index (gross div., CAD) net of an estimate for foreign withholding tax until 1998, and the MSCI Emerging Markets Index (net div., CAD) from 1999 through 2024. Our updated approach to emerging markets historical data provides a more accurate representation of historical emerging markets returns than in previous years.
The 2024 long-term expectations survey in support of the 2025 Projection Assumption Guidelines was distributed to a more targeted group of respondents. FP Canada and the Institute of Financial Planning are grateful to Professors Dimson, Marsh, and Stauntan for sharing their historic index data and allowing its use. Use of this historic data, which was previously unavailable, provides more representative data for emerging market equities and further enhances the Projection Assumption Guidelines.
The Projection Assumption Guidelines are accompanied by an Addendum containing the data sources on which they are based. The Addendum offers financial planners an opportunity to fully understand and replicate the recommended calculations. The Addendum includes a correlation matrix demonstrating the relationship of return patterns between asset classes. FP Canada also publishes an FAQ document, which is a useful resource for those who wish to learn more about the development and appropriate usage of the Guidelines.
The Projection Assumption Guidelines Committee is composed of individuals who are professional financial planners (through either CERTIFIED FINANCIAL PLANNER® certification or the F.Pl. licence in Québec) in addition to being actuaries or Chartered Financial Analyst charterholders. The Standards Panel is an independent panel composed of CFP professionals, at least one licensed financial planner from Québec, and a member of the public. The Panel's mandate includes oversight of the Projection Assumptions Guidelines Committee, which develops and maintains the Guidelines and Addendum.
You can find the 2025 Projection Assumption Guidelines, the Addendum, and the FAQs on the FP Canada website.
About FP Canada Established in 1995, FP Canada is a national not-for-profit education, certification and professional oversight organization working in the public interest. FP Canada is dedicated to championing better financial wellness for all Canadians by leading the advancement of professional financial planning in Canada.
About the Institute of Financial Planning As a leader in developing and promoting personal financial planning, the Institute of Financial Planning's mission is to ensure that today's and tomorrow's financial services professionals have the knowledge, the know-how and the social skills required to contribute to the financial well-being of people, families, and communities. The Institute of Financial Planning, previously known as the Institut québécois de planification financière, updated its brand identity in 2023, in keeping with its new mission and vision. For more information, visit Institutpf.org.