Even prior to the recent CPP enhancement announcement, the emphasis on saving and financial management has been a topic of conversation in the Canadian benefits arena for several months now. It is generally understood that aside from what Canadians may have picked up as students in a high school or college course, there are limited opportunities for adults to formally receive financial education training. This absence of education creates a notable gap in financial literacy levels. As a result, workplaces are filling up with workers who are stressed about their finances and who struggle to concentrate.
While there has been debate about what, if any, role employers should take regarding financial education, the reality remains that financial knowledge is lacking. As a result, employers find themselves in a position where they are called upon to close the gap and support their workers.
Employers who offer financial education in the workplace offers employees an environment where they can develop greater financial literacy and build confidence in areas that might be a source of great anxiety. Educated employees who've learned financial basics are better able to manage their financial future by taking control of their money matters today.
Financial basics look to address knowledge gathering in areas such as:
Perhaps the entire financial education conversation should include more focus on goal setting and understanding one’s financial value system. Providing employees with a list of questions to walk through either alone or with their partner might uncover some otherwise unsurfaced areas of concern when it comes to debt, savings and living with one’s means. Example of debt-management questions include:
Another way to facilitate financial education involves the use of online gamification where employees visualize themselves in retirement thereby allowing them to more realistically see their future selves. This allows them to practically consider the financial choices they make today.
Now with all of the available resources, can there be too much of a good thing? What if financial education turns to financial advice? Employers look for ways to ensure they don’t create scenarios that cross the line from education to advice.
Financial education can be separated from financial advice by taking a look at their respective definitions. Financial education is described as providing resources to help employees learn general financial terms and best practices. This type of information doesn't constitute advice. Widely available online, financial education is frequently offered through links to website resources. There are many reputable sources for free information on the home or landing pages of major Canadian banks. Financial education is also commonly offered via in-person workshops and worksite lunch ’n learns. These sessions are frequently supplemented by accompanying print material that offers general terms and unbiased resources.
Financial advice, on the other hand, involves providing a recommendation about a specific financial scenario. As employees start to internalize their own financial situations, there may be a tendency for questions to surface where specific recommendations are sought. This is where it pays to engage the services of an independent, certified financial planner who is qualified to work with employees on an individual basis. The point must be made to separate general financial education services from those that fall in the realm of advice giving. It must be made clear that the services of a financial planner or investment specialist are completely separate from that of the employer.
Once employers have established their parameters for offering financial education, there are many ways to creativity support employees’ ability to plan for financial success. We offer expert guidance in the realm of financial education and have a strong sense for what resources support greater workplace satisfaction. Don't let employee distractions and anxiety about their personal finances hinder productivity while increasing stress-related absenteeism in your workplace. Please contact us today. We’re here to help so you can focus on what you do best.
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.