How to drive a submarine

Or…why Canadians struggle to save for retirement

Brett Marchand
Head of Canada Retirement
The Manufacturers Life Insurance Company

Just for fun, I did an Internet search on the topic “how to drive a submarine” (you never know when you might need it, right?). I found some instructions that were 1,724 words in length. I then searched “how to retire comfortably” and discovered the top-ranked post clocked-in at over 2,200 words.

How can this be? Have we made saving money for retirement more complicated than driving a steel cylinder through the water hundreds of meters below the ocean’s surface?

I admit, there’s nothing scientific about my experiment, nor can I vouch for the credibility of either article, but the exercise does provide some clues into why we have a financial wellness crisis in Canada.

Failing to inspire

Despite years of hosting employee seminars and workshops, and creating calculators and budgeting templates to help people manage their money, the financial services industry has failed to reach too many Canadians. The Manulife Financial Wellness Index tells us 40% of Canadians are still financially ‘unwell.’ Most of these people report little knowledge of investing (56%) and only about 2 in 10 are reaching out to a financial advisor for help1.

If we assume poor financial health is one contributing factor to bankruptcy, the federal government’s insolvency stats tell a similar story: bankruptcies in Canada were up 3.2 per cent for the 12-month period ending February 20192.

Canadians deserve better. It would be unacceptable if a teacher in a classroom could only inspire half the students. So, it’s unacceptable that so many Canadians are financially unwell when it’s our industry’s job to help them stay fiscally fit. If we truly care about the people we serve, then I think the industry needs to figure out why it’s coming up short.

We’re in the business of financial health

Our job is to build tools Canadians can use to achieve financial health, and more importantly, educate them on how to use those tools. But today, we’re seeing fewer people taking advantage of the traditional retirement planning seminar. Often, those who do attend take the information home and put it on top of their fridge – albeit with good intentions to deal with it in the future. For employers, those meetings take time and resources to set up and organize.

As I contemplate this, I think back to this year’s hockey playoffs. During interviews, players spoke about how they weren’t looking ahead to the Cup, but they were taking it one series at a time, one game at a time, one shift at a time. In retirement planning, I think we’ve done the opposite. We’ve focused on the long-term.

Traditionally, we begin by asking employees to set a retirement goal – even though they might be thirty or forty years away from retiring (it might be their first week in the workforce!).

We then talk to them about contributing early and often, while maximizing employer matching programs, and a bunch of other important but potentially intimidating concepts. Are we asking employees to absorb too much at once? Is that turning them away, and turning them off, before they truly appreciate the importance of their decisions?

If I look across the hall to my colleagues in the Group Benefits business, I hear them talking about exciting innovations in health care that are bringing terrific improvements to people’s lives. With new, wearable technology, they’re able to reward employees who follow healthy behaviours. They’re influencing people to make small changes that lead to lifelong improvements in health. We know that physical health and financial health go hand-in-hand, so I think we need to take a similar approach.

We need new ways to inspire employees. And that means a whole new approach to financial education.

Today’s education is digital

It’s useful to look at how Canada’s colleges and universities are engaging with their students. In its 2018 survey of public post-secondary institutions, the Canadian Digital Learning Research Association found there were over a million registrations for online learning (2016 – 2017). The majority (83%) of the schools offer some form of online learning experience. Video (65%), online lectures (64%), mobile (55%), and social media (48%) are the most frequently used technologies3.

The financial services industry uses these same technologies, but as add-ons versus making them the core of its education efforts. To keep pace with the world, it’s time to go ‘all in’ and make financial education an easily digestible, on demand, entertaining experience that people want to take time to be part of.

How to improve employee education

Make it easy

  • It’s gotta be digital. If fewer and fewer people are going to the malls to shop today, how many can we expect to attend a seminar?
  • It must be on-demand. Today’s consumers expect to get the information they want, in the format they prefer, at the time they want it.
  • It has to be bite size. People aren’t thinking about retirement when they’re struggling with student debt or trying to pay the grocery bill. We need to show how little, easily manageable changes can help them achieve the most important financial goal they are dealing with today. Let’s help people establish a track record of successful saving for the short-term, so they can become champions of long-term financial planning.

Make it entertaining

  • It must be engaging, and often that means an element of entertainment. This is a huge shift for us, because money is serious business. But we live at a time when entertainment is instantly available and a huge distraction for our audience. At a minimum, we need to make financial planning something customers can feel good about. Think about this: if we can bring a smile to someone’s face, we create a pleasant chemical reaction in their body. That positive connection might be enough to overcome the intimidation and procrastination that we all, as humans, are prone to when it comes to making important financial decisions.

Make it very personal

  • Once our customers have done their homework and sought out the digital education they want, we must back that up with a truly personalized experience. Before making a financial move, 34% of Canadians usually consult with an advisor4. These one-on-one conversations can be face-to-face, but they might also take other forms: online meetings, chat, text and the list goes on.

Micro learning opportunities

At Manulife, we’re taking one step by creating a series of short videos that explain some basic financial concepts. We’re thinking of them as micro-learning opportunities. The videos are purely educational, available to the public, and we’ve tried to have fun with topics that are usually…not so fun. Certainly, there are other good examples out there, but the industry has a long way to go to catch up. Perhaps the subject will never be as intriguing as “how to drive a submarine”, but I think it’s a critically important topic for the millions of Canadians who are struggling to find financial health.

1 Manulife’s Financial Wellness Index – 2016
2 Office of the Superintendent of Bankruptcy Canada, 2019
3 The 2018 Canadian National Online and Digital Education Survey, by the Canadian Digital Learning Research Association, 2018
4 Manulife’s Financial Wellness Index – 2016