Advisor compensation, a regulatory sandbox and cyber resilience also make the cut
Canadian financial planners just got handed lower return projections and, for the first time, a housing cost benchmark to bake into client plans.
FP Canada and the Institute of Financial Planning released their 2026 Projection Assumption Guidelines on April 16, recalibrating the numbers that certified planners across the country rely on when mapping out long-term financial futures for their clients. The guidelines, refreshed annually, are meant to keep projections grounded in reality over horizons of 10 years or more — and this year, reality got a touch more conservative.
Equity return assumptions came down across the board. Canadian equities are now pegged at 6.3% and U.S. equities at 6.4%, both trimmed from 6.6% in last year's edition. International developed-market equities slipped to 6.6% from 6.9%, and emerging markets fell to 7.5% from 8.0%. Fixed income, meanwhile, dipped to 3.2% from 3.4%. Short-term investments held at 2.4%, the borrowing rate stayed at 4.4%, and the inflation assumption remained unchanged at 2.1%.
None of these moves are dramatic on their own, but they add up. For advisors building retirement projections or running Monte Carlo simulations, even small shifts in assumed returns can ripple through a 20- or 30-year plan in ways that matter to clients counting on those numbers.
The bigger story, though, may be what is new rather than what changed. For the first time, the guidelines include a shelter projection assumption, covering both primary residence appreciation and primary residence rents. The rate is set at 1% above inflation — or 3.1% nominal — drawing on data from the Canada Mortgage and Housing Corporation and global research.
Nick Hearne, chair of the Projection Assumption Guidelines Committee, said the addition reflects how central housing costs are to any household's financial picture. "Establishing long-term housing assumptions within a principled framework supports more consistent and defensible financial projections," Hearne said in a release.
The guidelines stop short of covering commercial real estate or investment properties, but for planners advising clients on the financial implications of owning or renting a home over the long haul, there is now an official number to anchor that conversation.
Elsewhere in the update, mortality and probability of survival tables were expanded to include assumptions for same-sex couples alongside individuals and heterosexual couples — a change aimed at making joint-life longevity estimates more accurate and inclusive.
There is also fresh guidance on handling short-term inflation. Julie Seberras, chair of the FP Canada Standard Council Standards Panel, pointed out that near-term inflation swings can meaningfully affect fixed-horizon planning — things like saving for a home purchase, paying down debt, or budgeting for a major expense. "Planners may need to take the current inflation environment into account when providing advice or preparing a fixed-horizon plan," Seberras said.
The assumptions are built from a mix of sources: actuarial reports for the Canada Pension Plan and the Quebec Pension Plan, 50 years of historical data for inflation and benchmark fixed-income and equity indices, the Shiller earnings-to-price average for relevant equity market indices, and results from an industry survey conducted in the fall of 2025. Planners can deviate by up to 0.5% in either direction and still comply with the guidelines. Anything beyond that needs to be documented and justified.
One detail worth flagging for advisors: the projected returns are gross figures. Investment management and administrative fees — which the guidelines note typically run between 0.5% and 2.5% depending on the product — must be subtracted to get to a net number. That gap between gross and net remains one of the most consequential variables in any long-term plan.
