It takes a village to raise financial literacy

If I had sought an advisor after I graduated school, I would’ve failed. I had limited financial knowledge and, though I wanted investment guidance, I didn’t know where to look.

As a student, I’d amassed significant debt and depended partially on my parents for support after graduation, since it took a couple of years to kick-start my career and stabilize my income. Given my financial status, I figured few advisors would’ve had patience to take me on.

Turns out I wasn’t the only one needing help. A 2009 Statistics Canada survey and quiz sought to determine Canadians’ financial knowledge levels. The average score was 67%.

This needs to change. Up to now, efforts to boost financial literacy have been championed by disparate groups, including the Financial Literacy Action Group, a collection of seven national associations that promote financial education, jobs training and entrepreneurship.

Read: Advisors must boost clients’ financial knowledge: Rooney

While these groups have made headway by hosting Financial Literacy Month, more can be done. Provincial control of educational issues means little has been done to standardize learning initiatives nationwide, for example.

Since 2012, Ontario has been required to include financial literacy in its curriculum from grades 4 to 12, says Jane Rooney, who was recently appointed national Financial Literacy Leader. Different approaches are being taken in Alberta, New Brunswick and Quebec.

To promote financial literacy, Rooney’s heading a steering committee that’s pledged to help educate targeted groups, starting with seniors, low-income earners, new immigrants and youth. Her appointment is significant since this is the first time there has been a dedicated forum that pools the experience of like-minded national organizations. But a 15-member cap on Rooney’s committee means there are gaps in representation. The committee includes members of the Financial Planning Standards Council, the AMF, OSC, CPA Canada and Canadian Bankers Association, but representatives from regulatory and certification bodies such as IIROC, MFDA, FSCO and CRA, are missing.

Read: 5 credit myths and realities

University graduates () and those with household incomes above $95,000 () had average financial knowledge scores of 73% and 71%, respectively. Comparatively, people from below-median- () and median-income () households scored 62% and 67%, respectively.

Source: 2009 Canadian Financial Capability Study

Fifteen, Rooney says, “is a good number in terms of getting feedback, but not so big that you can’t come to a consensus.” There was an open application process, but she wanted all sectors and priority groups equally represented.

That said, “members have two-year terms, so we’ll have the opportunity to look at the committee again.”

In the meantime, groups such as CRA participate on another government committee, which includes 50 participants representing all government departments and branches.

So Rooney’s established subcommittee relationships to gain insights on people’s financial, investment and tax challenges. And, groups such as Advocis and FPSC are sharing what industry training is currently provided to advisors, and how they learn about client communication and education. Provided she keeps these relationships, her committee can avoid duplicating existing literacy mandates. It’ll also highlight areas where regulators currently fall short of serving investors.

Read: Students need help understanding credit, budgeting

Enhancing financial literacy is a long-term challenge, but if the industry and federal government work together effectively, the gaps between Canadians’ needs and the help advisors can offer will close.

Katie Keir is content editor of Advisor Group.