A focus on lifelong learning and clarity in communications are essential to ensure Canadians have the financial literacy needed to save for retirement, a panel of experts told an audience today at the Benefits & Pension Summit in Toronto.
Pat Foran, a consumer affairs reporter for CTV who was selected in June 2009 as one of 13 members on the federal government’s Task Force on Financial Literacy, says that in the Task Force’s consultations held across the country, a consistent message heard was that financial literacy should be taught in school.
“I remember taking grade 12 chemistry and using a Bunsen burner. When I left high school, I never used one again,” said Foran, noting that, in contrast, people are faced with situations requiring financial understanding throughout their lives. He said it would be wise to offer a course for students in grades 11 and 12 that could teach them about financial concepts and vehicles such as interest rates, RRSPs and buying versus leasing.
Since education is under provincial jurisdiction, it is up to each individual province to determine how to incorporate financial literacy into their school curriculum. But Foran said that some provinces have already done this, including British Columbia, which offers a financial skills course to high school students called The City.
Another key to ensuring a financially literate population is to ensure communications about financial matters are clear and easy to understand.
“Many of the problems that people get themselves into are with documents that just aren’t that clear. We’ve all seen insurance documents that are 20 pages long. Let’s face it, many people don’t read these things,” said Foran.
Speaker Matthew Rotenberg said that the proliferation of new technologies is making it easier than ever for financial professionals to communicate with people. But at the same time, he said, people respond better when they’re approached as individuals rather than as part of a generalized group. Rotenberg said that while financial experts are best served by considering the needs of people in certain demographic categories—new Canadians or those who are close to retirement age, for example—personalized messages can be sent to individuals in these groups, through secure websites for plan members or via member statements.
Rotenberg said that if Canadians are taught financial concepts from an early age and are presented with clear, understandable information frequently throughout their lives, financial literacy on the whole should improve, as should Canadians’ ability to ensure adequate retirement income.
“[Literacy] is a very large problem. It’s more than just the materials. It’s societal and generational, and we need to work on a multi-directional basis to change it,” said Rotenberg.