When it comes to understanding how to manage money, many Canadian business leaders say school classrooms are where the learning should start.
A panel of Canadian CEOs recently expressed their views on financial literacy in a poll conducted by COMPAS Inc., and 51% said schools should play the lead role in building the country’s foundation of knowledge. “Our schools need to prepare the students of today to manage their lives and careers,” said one respondent.
Promoting financial literacy through a government-led campaign rolled out by financial institutions met with only 13% approval, and leaving the task to post-secondary institutions received just 9%. CEOs were least interested in direct outreach efforts by the government, with only 3% in favour. “We don’t need more government advertising” was the reaction of one leader.
All this comes on the heels of the recent launch of the federal government’s Task Force on Financial Literacy. It was established to develop a focused, concrete plan of action forstrengthening the country’s understanding of money issues. A final report at the end of this year will make recommendations for change to the minister of finance.
Canadian CEOs have strong opinions on what needs to be taught. When asked to score a series of financial principles in terms of how important it is for the public to know each one, making credit card payments promptly to avoid interest scored highest, with a mean of 6.6 on a 7-point scale. The leaders were also enthusiastic about teaching the value of pursuing higher education, with a mean of 6, and the benefit of saving for RRSPs as soon as possible, with a mean of 5.9. “The value of an early start in saving and building value is very important,” said one leader.
Garnering less enthusiasm were considerations such as asset allocation strategy (balancing an investment portfolio to take into account goals, risk tolerance and length of time), with a mean of 4.7, and understanding price-earning ratios for traded stock, which saw a mean of 4.3.