Toronto, Ontario

Check against delivery

Good afternoon. I am pleased to be here to speak to a room filled with leaders in the financial services industry.

What a lot of financial knowledge and deep experience with consumers we have here in this room. Thank you for the opportunity to explore with you ways in which we can work together to champion financial literacy.

Figures supplied by CLHIA indicate that about 21 million Canadians carry life, health, property and other forms of insurance. Obviously, it’s an important part of their financial well-being.

But do consumers always understand what they are purchasing? Are they able to ask the right questions? I think that we all agree that we can do more to improve the financial literacy of Canadians.

The financial products and services available to consumers today are more complex than ever, and the need for concise, clear and accurate communication has never been greater.

I will begin my remarks today with an overview outlining why we need urgent action on financial literacy.

Then I will share the latest results from our Canadian Financial Capability Survey and what they reveal about the financial literacy of Canadians.

I’ll describe the evolution of federal financial literacy efforts:

• my mandate as Financial Literacy Leader
• the creation and work of the National Steering Committee on Financial Literacy
• the three phases of our national consultation process
• and the current development of the national strategy for financial literacy.

I will close with some ideas about how we can strengthen financial literacy by collaborating, communicating clearly and using teachable moments in the lives of consumers.

The Financial Consumer Agency of Canada has a dual role. First, to ensure federal financial institutions comply with consumer protection measures. Second, to promote financial education and raise consumers’ awareness of their rights and responsibilities.

We learned some hard lessons in the global financial crisis that started in 2008 about how shocks to our financial system can impact consumer finances.

While Canada came through that crisis fairly well, the need for financial knowledge is still acute.

Record-high debt levels and chronically low savings rates today leave Canadian consumers vulnerable to economic shocks.

That is why financial literacy is more than a nice-to-have skill; it is a necessity in today’s complex world, as important as being able to read and write.

There’s a growing consensus across the country — in classrooms, board rooms and government meeting rooms — that financial literacy is fundamental to a good quality of life and a strong and stable economy. Canada has emerged as a global leader in the field of financial literacy.

The federal government has made it a priority, as shown in a number of initiatives, including the creation of my office — the Financial Literacy Leader.

If we are going to strengthen financial literacy, we need to understand the attitudes and motivation of consumers in handling their money.

In 2009 and again last year, the federal government conducted the Canadian Financial Capability Survey, or CFCS, to shed light on Canadians’ knowledge, abilities and behaviours concerning financial affairs.

One thing the 2009 survey showed us is that most Canadians see the value of insurance: 63 percent buy life insurance and 35 percent own disability insurance.

A large number of Canadian families also see the value of investing. 41 percent own stocks, bonds, term deposits, GICs, or Non-RRSP Mutual funds.

And 21 percent of Canadians received income from interest, dividends, capital gains or other investment income such as net rental income.

Canadians are confident about their investment knowledge. 52 percent of Canadians say that they know enough about investments to choose ones that are suitable for their circumstances.

Of the Canadians that made use of free or paid advice, about 14 percent use advice for insurance products. 24 percent use advice for general financial planning, 21 percent for retirement planning and 12 percent for tax planning.

Where do they go for this advice?

Not surprisingly, the two key sources were banks, financial advisors or planners, each cited by 35 percent of Canadians. 9 percent said they got advice from insurance companies.

51 per cent of Canadians cited financial advisors as being the most influential in providing advice about financial investments. Knowledgeable friends came in second place, at 41 percent. This shows quite clearly that Canadian consumers value your guidance.

Another result, in 2009, Canadians expressed confidence that they had the ability to shop around to get the best financial products, such as loans or insurance plans, with 59 percent rating their ability as either very good or good.

While we are still analyzing the 2014 results, here are some preliminary findings. It shows some serious gaps in Canadians’ financial planning and knowledge.

We see that:

• Only 45 percent of Canadians have a budget.
• About 30 percent are struggling to pay their bills.
• More than 60 percent of adults rate their financial knowledge as poor.
• 60 percent don’t know how much they’ll need to save to maintain their desired standard of living in retirement.

This illustrates the urgency of the need for greater financial literacy.

As Canada’s first Financial Literacy Leader, my job is to collaborate with organizations and individuals, and to co-ordinate activities that strengthen the financial literacy of Canadians. It’s also to develop and implement the national strategy for financial literacy.

My position resulted from a recommendation of the Task Force on Financial Literacy, which issued its report in 2011. Don Stewart, the former CEO of Sun Life, chaired the Task Force.

Another recommendation from the Task Force was the creation of a National Steering Committee on Financial Literacy  to help in developing the national strategy to strengthen financial literacy.

The committee hit the ground running after Minister of State for Finance Kevin Sorenson and I announced its appointment last July. The 15 members include representatives from banking, insurance and the investment industries, all leaders in financial education. They are from the non-profit, private and public sectors, as well as priority groups. More on those in a minute.

Some of you may know Leslie Byrnes from CLHIA. As a member of the Steering Committee, she has been invaluable in moving our agenda forward.

The committee has provided me with invaluable strategic advice. Leslie and the other members will continue to play a role by championing initiatives and engaging stakeholders as we roll out the strategy later this year.

A tremendous amount of work has gone into preparing the national financial literacy strategy. The three phases of our consultation process took us across the country to talk with stakeholders.

It was tremendously rewarding for me personally and I learned a lot.

The first phase focused on the financial literacy of seniors and those approaching their senior years.

We completed and launched the Seniors’ Strategy in mid-October and we are now implementing it. Its four goals are:

• to engage more Canadians in preparing financially for their future years as seniors
• to help current seniors plan and manage their financial affairs.
• to improve understanding of and access to public benefits for seniors
• and to increase the number of tools to combat financial abuse of seniors.

Two great new initiatives in support of this strategy were announced in November as part of Financial Literacy Month.

The Canadian Bankers Association launched “Your Money Seniors,” which enlists volunteer bankers to hold sessions with consumers and caregivers about fraud, financial abuse and cash management for seniors.

Credit Union Central Canada released a program geared toward fighting the financial abuse of seniors by training frontline workers to recognize, review and respond to possible abuse of their clients.

Phase 2 of our consultations for the national strategy focused on priority groups.

These include Canadians with low incomes, newcomers to Canada, Aboriginal peoples and people with disabilities. We received a great deal of feedback on many diverse issues that need to be addressed.

Barriers to financial services was a common thread in the Phase 2 consultations, as was the fact that people in the priority groups often need support in financial planning and access to trusted, objective support networks.

Many who contributed to phase 2 emphasized the importance of lifelong learning, starting in childhood and continuing through the senior years.

The third and final phase of our consultations focused on young and adult Canadians.

Among the suggestions we received:

• Importance of keeping track of expenses and controlling spending
• Change attitudes toward credit and debt and stress the importance of saving
• Encourage partnerships between the government and groups in the private and non-profit sectors
• And finally, make financial literacy fun!

Financial learning can be both fun and interesting. We take a lighthearted approach in this short video that introduces Canadians to our new Canadian Financial Literacy Database and self-assessment tool.

We’ve had some great feedback on the video and on the database. This one-stop shop includes about 860 resources from over 75 organizations.

It is an excellent example of the power of collaboration among all sectors involved in financial literacy.

It also serves as a networking tool for potential partners. A related self-assessment quiz allows consumers to find out how their money management skills measure up, and links them to resources available in the database.

FCAC launched the database and quiz during our engaging financial literacy conference in Vancouver, which brought together 300 delegates from across Canada.

The conference was part of Financial Literacy Month, which has grown beyond my expectations in just a few years. Businesses and organizations across the country held over 1,200 events.

The dialogue on social media also broke records. I invite you to join us for the next Financial Literacy Month, in November 2015.

Moving forward, what are the main points to keep in mind as we advance the cause of financial literacy?

First, financial literacy is everyone’s responsibility. Collaboration is crucial to making progress and you will see it in everything that we do.

Second, a one-size-fits-all approach will not work. We heard repeatedly that our messages and our initiatives must be tailored to those we are trying to reach, whether they are people with disabilities, seniors on fixed incomes, Aboriginal peoples or young Canadians.

Also, people’s financial needs and priorities change at key transition points in their lives, such as starting a new job, buying a home, having children or retiring.

The people in your industry often work one-on-one with Canadians at these transition points.

Conversations about workplace benefits, property and life insurance are all opportunities for “teachable moments,” where people in the financial services industry can help Canadians make the financial decisions that are best for them.

But providing key information when consumers are likely to be receptive to it is only half the effort. It’s equally important that the information offered is communicated clearly, that it’s easy to use and easy to understand.

The financial sector has done a lot of work to increase transparency, disclosure and clear communications in the information they provide to consumers, and I’d like to recognize these efforts.

For example, CAFII put forward a key position to “provide consumers with straightforward, user-friendly, plain language explanations of insurance products and service options and provide leadership in consumer education.” I commend you for taking such a clear and positive position.

Clear language and presentation are important to FCAC, too. We aim to provide objective and easy-to-understand information and tools, and we rely on consumer feedback to help us assess how well we are doing. A good example is our 2012 publication, Understanding Insurance Basics.

However, there is much more to be done. I believe we can accomplish a great deal together.

I invite you to list your financial literacy resources in our database if you haven’t already done so.

You can also incorporate FCAC materials into your programs and initiatives. These include some excellent training tools, particularly for workplace financial literacy training.

You can ensure the documents you give to clients use clear language, tailored to their specific needs. And you can look for ways where your industry and companies engage with customers around those “teachable moments” that I described earlier.

As I mentioned earlier, FCAC will release the national strategy for financial literacy later in 2015.

This strategy will be a call to action for all sectors. Opportunities abound for us to collaborate as, together, we begin to implement the strategy.

Please stay in contact with FCAC. Visit our website, itpaystoknow.gc.ca, follow us on social media — the addresses are on the slide behind me — and you’ll see where your organizations can be a part of the effort.

We have a shared responsibility to work with Canadians to improve their money management skills. Because when consumers make informed financial decisions, they help build a stronger financial market and a better economy for us all.