Blogs & Comment

How to really cure financial illiteracy

The Task Force on Financial Literacyhas issued its report. Are we any closer to fixing financial illiteracy? Im not optimistic about it. The report didnt deal much with a central issue, in my opinion.
There are tens of thousandsof financial planners and advisors in Canada. Older people rely on them extensively, according to an Investor Education Fundsurvey. On this basis, it would seem financial illiteracy should be low in Canada.
But financial advisors in Canada work within a framework where the emphasis is on generating sales and building book. They are not bound by a fiduciary duty to put clients interests first, as is the case for doctors, accountants, engineers and other professions.
If financial advisors hadfiduciary standards, we might hear less about financial illiteracy. Canadians would be getting the kind of advice that keeps them out of trouble. And lack of financial knowledgeby Canadians would not likely be abig concern, just like Canadian’s lack of medical or legal knowledgeis not abig concern in the fields of medicine or law.
So I agree with Canadian Financial DIY, who said:
The national priority is not financial literacy or a national securities regulator but better advisors Though we all can and should always bear the ultimate responsibility for our finances, just as we do for own health, it does not mean we should not expect to find ready availability of expert financial “doctors” to give us trustworthy impartial advice.