Head of Canada Retirement
The Manufacturers Life Insurance Company
I don’t think there are many people out there who would disagree when I say, “a lot has changed over the last few months, and much of it has been challenging”. With the coronavirus pandemic closing stores and making in-office work risky, Canadians everywhere are adopting new strategies to cope. The question we’re now asking is: are those new strategies going to work long term without the right guidance?
Of these, probably the one I’ve noticed most profoundly is the change in how Canadians are going about their financial planning. There are a lot of popular tips out there. They range from “this is a great time to invest!” to “stuff all your cash under your mattress and sleep on it.” In a world with enough anxiety already, the financial uncertainty faced by Canadians is difficult.
The problem is, there’s no one-size-fits-all solution. Indeed, some people find themselves with more cash on hand these days, as opportunities to spend it have dwindled (how much have you saved on gas over the last 6 months?). At the same time, many others are dipping into their savings just to make ends meet. There’s no single piece of wisdom that addresses every situation.
“As the pandemic has deepened, financial institutions and consumers alike have been leaning on digital and online options to do business. Manulife is no different. We’re looking for and developing innovations to help your plan members find financial success in these uncertain times.
And, as it turns out, one of the innovative items that has the highest potential impact has stood the test of time – personalized advice. The numbers prove it. Canadians who work with an advisor realize 3.9x the savings after 15 years than those that go it alone.1
Though online financial management offers many advantages, we’re learning that personalized advice continues to stand the test of time as a positive and impactful step along the road to making financial decisions.
The Race for Digital Solutions to Pandemic-posed Problems
If you’ve ever seen the classic movie, 2001: A Space Odyssey, you’re familiar with the opening scene in which a group of primates encounter a monolith from outer space. The monolith gives them the power to make tools. In some ways, the coronavirus pandemic has had the same effect, jumpstarting a new wave of digital tool creation and adoption that in any other circumstances might seem positively alien.
Let me give you an example. Since May 20th of this year, our mobile app has been surveying plan members and asking what they want the app to do. The response has been strong with over 47% of our mobile users providing feedback to this survey in just two weeks. What plan members want is clear. Almost half the voters told us the first app upgrade they want is the ability to “Change the funds I’m invested in.”
While there’s no doubt what plan members want, to me, why they want it is a more compelling question. I suppose the simplest answer might be that in-person consultations with financial advisors are more difficult to schedule right now, and the process of executing a financial move might seem to be something that’s best carried out from the convenience of a mobile device.
Your plan members might be looking for tech solutions that put them in the driver seat for their finances. But even if they’re driving the car, without a roadmap where will they be headed?
Going it Alone is a Tough Road
Self-directed financial decisions, especially in reaction to a volatile market, can be a bad idea. There are platforms out there that allow you to have complete control over your investments, without anyone available to give you advice or assistance. That might be fine for some people, but for others, it creates the potential for a financial horror story. This is why the power of advice is so important when it comes to matters of finance.
We want our plan members to have access to the technology that empowers their financial autonomy. But unlike other platforms, Manulife encourages the power of the app combined with the value of the advisor. To fill the gap for plan members who don’t have access to advisors we’ve invested in our own PlanRight™ advisor program. PlanRight™ offers easy access to trained financial advisors and experts who guide our plan members through times like these.
These advisors have seen a measurable surge in demand over the course of the pandemic, and that’s a good thing. It shows people are taking proactive measures to seek professional guidance about their finances. And best of all, there’s no cost to plan members when they reach out for advice. This is the difference, and a major key to our customers’ financial success.
Education Before Action
Despite the anxiety and uncertainty caused by the pandemic, there’s some good news, too. For people who have lost their jobs or been laid off, the Canadian government has stepped up to help them get through with rapidly deployed (and digitally administered) financial aid. Regardless of what happens next, be it a second wave or future lockdowns, we are fortunate to have programs and the political will to help Canadians get through it.
But this still begs the questions, “What should I do with my money? Is it safe to invest? Should I stockpile cash?” As new information becomes available, and the market steadies itself, best practices will present themselves, and the people on the financial front lines -- advisors -- will be able to offer best courses of action to you and your plan members.
There’s no better time for you to encourage your plan members to turn to the educational resources available to them, whether that’s a qualified expert from another financial institution or their own PlanRight advisor. As the uncertain times continue, and we adapt as individuals and communities, proceeding with a level head will be incredibly important.
This is more profound than ever, when new technology is enabling quicker and possibly less-well considered action. As a plan sponsor, you have the unique opportunity to connect with your plan members and point them in the right direction for support and guidance. Let them know we’re here to help with their financial success and tell them to get in touch with us today.
1. Claude Montmarquette and Nathalie Viennot-Briot, 2016 -https://www.cirano.qc.ca/files/publications/2016s-35.pdf