Why is there so little financial education in the workplace?

Financial Education can make the difference between an ordinary Group Retirement Plan and an exceptional one.

It’s pretty sad but there is very little financial literacy happening anywhere in Canada and in many cases it is absent even in the workplace where there is a group RRSP or pension plans in place.  The little education that does exist is focused on product and plan education.

What is financial education?

When you think of a financial education program, what do you think of?  Most programs are run by someone who is trying to sell you a mutual fund, investment or insurance.  If not, they are probably a representative who works for a specific company, teaching you about the plan or the products offered by the plan.  The little education that occurs is typically short and shortsighted.

It’s important to understand what financial education is not.  It's is not merely ‘plan' education and ‘product' education.  Financial education should not be a seminar or workshop where someone is just trying to sell you a financial product.

Instead financial education should truly be educational and needs to go far beyond products.  With or without the help of products, education should also be entertaining and inspiring.  Education inspires action and engagement.

Financial education should be comprehensive.  It needs to cover more than just investing in a mutual fund, buying a RRSP or buying more life insurance.  It should teach people the key habits to become financially savvy and take control of money, investments and retirement.  Good financial programs should teach people how to reduce and manage debts, understand government benefits, work with financial advisors, research investments, plan for retirement, understand lifestyle, track spending, and so much more.

Great education will take employee benefit programs to a new level!

Why is Financial Education not happening?

You would think it is the role of the plan sponsor to provide education but the reality is very different.  Their version of financial literacy programs is narrow sighted focusing on the plan and products within the plan.

The big consultants are strong advocates of extended education but they are not in that game.  They believe it should be the plan sponsors role to provide that education.

Group benefit brokers generally don’t do the education because they are not teachers.  A lot of brokers are great at designing plans and implementing plans but they are just not good speakers or educators.  The few brokers or advisors that do provide education programs may do so but with the bias of providing product-oriented solutions.

Employers that see the value with financial education programs usually have to pay extra by hiring third party educators to provide good education workshops.  Because there is no fiduciary obligation to provide extra enhanced education, the only employers that will do this are employers that see value from going beyond the minimum standards.  Employers who really care about the financial well being of their employees ensure that

The problem remains simple:  There is a huge void that needs to be filled and we are the organization that can fill that void.

Why is Financial Education important?

First and foremost, there is a huge appetite for financial education.  The Task Force for Financial literacy was created by the government to address the literacy problem and it was clear that Canadians want more financial education and one of the best places for it to happen is in the workplace.

Financial programs are good for employees.  The worst employee to have is the one that is financially stressed and constantly worrying about money.  There is a tremendous amount of research confirming that when you improve the financial literacy for the employee, it brings tangible benefits to both the employers and employees.  Studies have shown that financially stable employees are more productive, appreciate their jobs more and have less absenteeism.  Helping employee’s bottom lines also helps employer bottom lines.

Just like wellness programs can turn an ordinary benefit program into something really special and unique, financial education can also help employee see the true value of a benefit program.  It helps employees really appreciate what their employers provide. Aligning the employer, employee, and the benefit plan is essential for the financial and professional success of any organization.

Good programs can take an ordinary group retirement program and make it exceptional.

Financial Education is our business

Not only do we have the skills to put educational, entertaining and inspirational financial literacy programs in place but we also have the toolbox to accommodate the varying needs of different employers.  We have experience with small businesses with less that 25 employees as well as experience with massive employers like the governments, utility companies and large multinationals.

Whether it’s workshops, books, audio programs, online training, or face-to-face consulting, we have a passion to educate properly.  We make employers look good by creating financial education programs that employees rave about!

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

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