Making an impact: Results of the National Research Plan
April 26, 2018
By Jane Rooney, Canada`s Financial Literacy Leader
Two years ago, a distinguished group of research experts was appointed to our first Research Sub-Committee at FCAC. Their task was to work in collaboration with other stakeholders on research-related matters while advising me and my National Steering Committee.
I was very proud to work with the sub-committee to advance research efforts in the financial literacy domain. Now that its mandate has come to a close, I wanted to use this space to update you about the phenomenal progress its members have made toward the goals of its National Research Plan for Financial Literacy 2016-2018. That plan had three objectives:
- Inform the implementation of the National Strategy for Financial Literacy – Count me in, Canada
- Enhance coordination among researchers
- Generate key empirical evidence
With today’s release of the committee’s Progress Report on Canada’s National Research Plan on Financial Literacy 2016-2018, I’m happy to say we have not only reached but surpassed these objectives.
Early in its formation, the Research Sub-Committee identified that focusing the efforts of the research community on a concise set of critical research questions would enable financial literacy programs and interventions to become smarter, more targeted and more effective. Its starting point was the importance of developing “smarter” financial literacy interventions. Simply put, this means informing the evolution of financial literacy interventions through empirical evidence. For example, we know that we cannot simply focus on building knowledge. Instead, we must take into account the many factors that contribute to financial decision-making, the best timing for interventions, and the most effective ways to deliver them.
The evidences tells us that financial knowledge is important. However, on its own, knowledge is not enough to lead to financially desirable behaviours. Financial confidence is a complementary and important factor that relates to financial decision-making.
A promising approach to explore further is experiential learning – or, learning by doing. This appears to be most effective because it allows consumers to gain first-hand experience with financial products and skills relevant to their own life circumstances.
A second major accomplishment of the National Research Plan for Financial Literacy 2016-2018 is its exploration of the exciting field of behavioural economics as a complement to financial literacy interventions. Understanding why and how consumers behave in specific ways is a key element in driving better financial decision-making. The studies described in this report demonstrate that financial literacy programs and tools can be enhanced through the application of behavioural insights (such as choice architecture, anchoring, just-in-time messaging, and avatars).
A third outcome of the Research Sub-Committee’s work is research around how to better target financial literacy efforts toward specific populations. In particular, the report emphasizes the importance of programs that identify and meet the unique financial needs of Indigenous Peoples. Indigenous Peoples view financial wellness through a different lens than other Canadians. Further, there are a number of systemic barriers that impact the financial decision-making of Indigenous Peoples. As such, it is important to consider a culturally-relevant definition of financial wellness in measurement tools to fully understand the financial needs of this population. My National Steering Committee has recently established a working group for Indigenous Financial Literacy.
The report also emphasizes that workplaces are an ideal location for reaching Canadian adults with interventions. More than half of Canadian adults are interested in accessing financial education through their workplace. We learned through our research that the most highly-sought programs are those that teach about how to plan and how to save, and so we are working on addressing those findings through our Workplace Financial Literacy working group.
The progress report also includes information about the good survey results for Canadian youth and adults when it comes to financial literacy, and the importance of moving towards a more comprehensive definition of the term “financial literacy” itself. A growing consensus is emerging that the ultimate measure of success should be improvement in individual financial well-being. Research also shows that having control over your finances and meeting financial goals is important to overall well-being.
I will be highlighting some of the key findings in some of my upcoming blogs, so please watch for these new posts. The results are invaluable to stakeholders across Canada as we work together to successfully implement the National Strategy and to strengthen the financial literacy of Canadians.
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