What happened to Canada’s financial literacy task force?

The task force, appointed in June 2009, held hearings across Canada in 2010 and put out a report on what it heard.

Then, everything went quiet.

What took so long? We’ll find out tomorrow when the task force chair, Donald Stewart of Sun Life, talks to the media about the final report. I’m on the list at 11 a.m.

The federal Finance Minister, Jim Flaherty, will likely announce something, too, coming out of the task force’s work.

I have no idea what’s in the report, but I can make a few guesses.

One, the task force will recommend more access to financial information. But will it address the question of demand? There’s lots of information available, but many people don’t engage with it.

Two, the task force will press for more personal finance education in schools, perhaps as young as kindergarten. But education is a provincial role, so the federal government can’t do much except cheer on the sidelines.

Three, the task force will NOT address conflicts of interest. Bankers, investment dealers and insurance brokers promote what’s in their own interests, not what’s in the customer’s interest. From what I could tell, industry conflicts weren’t part of the mandate.

I wish the financial literacy task force hadn’t disappeared and shut down its social media campaign on Twitter and Facebook. It would have been nice to keep the conversation going while waiting to see what comes out of this exercise.

I’ll check in later when I know more about the final report and the finance minister’s reaction.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

9 thoughts on “What happened to Canada’s financial literacy task force?”

  1. I work for a literacy council in Southwestern Ontario. I recently developed a financial literacy course for the Children’s Aid Society. I am teaching it on a weekly bases and I am learning very quickly most people do not have the financial skills to budget, pay off debt, understand investing, or how to save money.

    We also recently learned about the RDSP (Registered Disability Savings Plan). We have many clients on ODSP and an RDSP may be a useful tool for them.

    HOWEVER, the product information is so complicated I can barely understand it, although I have worked in the financial industry, have a B.A. and teach.

    The problem with so much financial stuff is that it is not clearly written. Almost half of all Canadians are not at the standard literacy level to be able to read and understand these things.

    I think the government, the task force, and all financial services/institutions should start thinking about clear writing strategies to help Canadians better understand their finances.

  2. There are two elements to thinking about financial literacy, and it seems to be that the task force wasn’t able or willing to address either of these ideas.

    First, as was mentioned in another comment, there is an abundance of material relating to financial matters. However, there is an issue of whether anyone has the ‘cultural’ incentive to access these materials – to be plain, those of us who spend time and energy and have a deep interest in our own finances are seen as greedy, self-absorbed and ‘inappropriate.’

    Filthy lucre, money-grubbing and cheap are words that come to mind and that I have often heard.

    There is also the issue of understandability and focus. Information produced by a financial institution is built on its ability to ‘sell’ to the consumer and protect the institution. It is rarely, if ever, built on the assumption that the reader/consumer should understand and be able to make an informed choice. Who is the audience for these materials?

    The second big element ignored or missed by the task force was the built-in value of having an ill informed or even misinformed customer base for financial institutions.

    I know too many people who have their TFSA in a savings accounts at a bank, earning minimal interest. Most of these people believe that because the words ‘savings account’ are in the title of the TFSA that a savings account is their only option. And, of course, their bank will open that savings account without comment.

    In my own experience, my bankers have not done anything to make me incur more fees but they have also done little or nothing to help me figure out how to decrease the fees I do pay.

    The Task Force should have addressed the Financial Literacy improvement that is possible at the front lines of the financial services industry.

    Plain, simple language should be used. Clear, well described alternatives should be provided. All fees and their impact should be clearly identified.

  3. Why are the excesses of the financial services industry blamed on the consumer?

    Investors don’t ask to pay the highest costs in the world for poorly performing products. Canadians aren’t protesting in the street for more commission-driven advisors to halve their returns with high fat, high risk mutual funds in self-serving asset allocations.

    Few investors and savers know their costs, risk level, or returns because it simply isn’t disclosed in any useful way.

    Yes, there are 70 page prospectuses with costs listed somewhere, but good luck figuring out which version of a mutual fund you hold because the fund code probably isn’t on your statement.

    Financial services is the only consumer activity in Canada where consumers are not given their exact costs of doing business. Would you buy a car without knowing what it costs?

    Until there is a high standard of plain disclosure, financial literacy is just the industry’s way of blaming everyone but themselves.

    While improving literacy is positive, the best solution is to let consumers know which products and services are most likely to work best for them. That is the approach the Investors-Aid Co-operative of Canada takes with members.

    Only about 10% of investment products and advisory options work well for consumers and there is little point wasting time sifting through the rest.

  4. Dear Ellen,

    I am a South African citizen and senior lecturer in Financial Accounting at the University of South Africa. I am doing my Master’s Degree in financial literacy and specifically the subcomponent of mathematical literacy.

    I came across the Task Force on Financial Literacy’s website address in an article, but even though it opens I receive the message that the website has been archived and that the information is only for historical purposes.

    Are you perhaps aware of any changes in the Task Force after the last report in February 2011?

    I would greatly appreciate your assistance.

  5. I think finance education in schools would be a great idea. Many of us grow up not having a clue about how to invest or save money. I have been saving my money in a jar when I was young, and now I just save it in a savings account instead.

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