Head of Canada Retirement
The Manufacturers Life Insurance Company
What’s the best money advice you’ve ever been given?
- A penny saved is a penny earned?
- Buy low, sell high?
- Spend 2 months’ salary on the engagement ring?
I won’t comment on the wisdom behind any of those examples, but I do want to talk about the guidance being offered during Canada’s Financial Literacy Month in November.
Helping Canadians take charge of their money
Financial Literacy Month is part of the government’s commitment to help people get the knowledge, skills, and confidence they need to manage their money well. When people are in a good place financially, our communities and economy stand to benefit.
The theme for 2019’s Financial Literacy Month is “Take charge of your finances.” Each week in November has its own focus:
- Start with a budget
- Set financial goals
- Be a smart financial consumer
- Borrow money wisely
These are good themes. Following these four principles alone would be a great step in the right direction for many people who are struggling to find financial wellness.
But, if I had the power to re-write the calendar and add a fifth week to November (not an easy thing to do, but I’m working on it), I’d add one more to the list – advice for anyone with a workplace savings plan:
- When it comes time to save, make sure you take advantage of employer-matching programs.
For sure, many of your employees are already doing this. But there will be some for whom it’s more important to put food on the table today, than to save for tomorrow. That’s a reality many people are facing, and it’s a fact we in the financial services industry need to recognize so we can begin to better reach and help this group of Canadians.
Financial literacy takes time
Like physical fitness, becoming financially well doesn’t happen in a day, a week, or a month. It takes time, discipline, and courage to develop good habits around spending, saving, borrowing, and debt management. For most of us, these elements are fluid, so we need to constantly assess, prioritize, and then re-prioritize as circumstances and life stages change. True, for some people it might not be possible to take full advantage of every savings program available to them today. But as their situations change, it will be helpful if they are primed and ready to take their next best step. That way, when a spare dollar comes along, using it to get employer-matching savings should be at or near the top of their list.
Individual advice is one key to building financial literacy in Canada
For years insurers, banks and others have been working away to improve the country’s financial literacy, but with limited success. To truly hit the mark, I think our industry needs to shift away from delivering a one-size-fits-all kind of general guidance that’s well-intentioned but fails to resonate with many of our customers. Instead, let’s deliver a much more individually tailored, personalized form of one-on-one advice. This model should recognize the challenges a person is dealing with today and consider everything we know about that customer and his or her circumstances, goals, and roadblocks.
At Manulife, we’re finding the demand for individualized financial advice is going through the roof. We’ve had good success with programs that offer plan members a chance to meet face-to-face or over the phone with accredited advisors who can take the time to offer holistic financial advice (at no extra cost). So, it’s an area that we’re going to continue investing in and growing.
I think that’s one benefit of a workplace savings plan that is often overlooked by customers: being part of an organized program opens the way to new forms of credible and trustworthy guidance. It might be the only financial counselling a plan member has access to, and therefore a key to helping employees develop sound financial habits and improved financial literacy.
November will come to an end (whether it’s four or five weeks long!), as will this year’s Financial Literacy Month. But the challenge is on-going. I think the best money advice is meaningful, personal, and practical. It fits within the scope of possibilities for where that person is, at that time, and in that place. Let’s make this our goal as we do our part to improve the country’s financial literacy and the success of our organizations and communities.
You can read more about Financial Literacy Month and the activities taking place on the Financial Consumer Agency of Canada’s website .
Join the discussion about the financial wellness of Canadians by following #FLM2019 on Facebook, Instagram, and Twitter.