'The threat of financial insecurity in retirement is real and not good for anyone; what comes with that is stress,' says financial planner.
The conversation around financial wellness is gaining momentum and for good reason. For many Canadians, the road to retirement is fraught with financial insecurity, stress, and a lack of preparedness. Recent research has also shown financial wellness is imperative to workplace productivity.
Consequently, the evolving retirement landscape is plagued by longer lifespans, longer work lives, and fewer pension plans. The need for robust financial planning has never been more pressing. Tanya Staples is a Professor of Financial Planning at Conestoga College, she holds a CFP® designation, is a PhD Candidate in Personal Financial Planning at Kansas State University, and has ten years’ experience in benefit consulting. She offers a stark statistic: only around 40 per cent of Canadians have a financial plan or even use a financial advisor. She makes the case for why employers should take a more active role by including financial planning as part of their benefits packages.
"The biggest concern is the threat of financial insecurity in retirement, which is real and not good for anyone and by default, what comes with that is stress,” she says, emphasizing the need for a collective effort involving Canadians, employers, financial planners, regulators, and institutions. "We all have to commit to this."
While financial planning services are critical to one’s financial wellbeing, they’re not always accessible to everyone due to cost barriers. Staples, who holds a certification in corporate wellness management through the US-based National Wellness Institute, acknowledges that affordability is a significant hurdle, as financial planning is often seen as a service that only wealthy households need and can afford. In many cases, she says complicated work requires someone with extensive knowledge, professional designations, training and experience, but not everyone can afford such expertise.
“One of the things we know about financial education is a one plan that suits everyone does not work. You must meet people where they are at in the financial education process,” she asserts, pointing to research by Tim Kaiser and Lukas Menkhoff that found while financial education interventions can be effective, changing behaviours, particularly around debt management, requires sustained effort and habit-building. “We have to use what’s already out there,” adds Staples.
This is where employers can step in to fill the gap. She believes plan sponsors have an opportunity to make financial planning more accessible by incorporating it into workplace benefits. Offering financial planning services through employers not only improves accessibility but also delivers added value for both employees and organizations.
Staples points to some organizations who already offer pro bono services like Prosper Canada, FP Canada and the Financial Planning Association of Canada (FPAC). “There are some individual financial planners that do pro bono work as well as part of their own practice in Canada,” she says, highlighting her own experience working with a U.S.-based global company, where she provides fee-for-service financial planning to Canadian employees. "The value I can add and the variety of planning I am able to engage in is what keeps me motivated," she says.
Moreover, employers who recognize the current financial challenges facing Canadians stand to benefit significantly by addressing financial planning. Staples points to shifts in the retirement landscape that have created a "massive gap" for employees. "Canadians live longer. They stay in school longer. More Canadians have student debts. Homes cost way more than they did 20 years ago and fewer Canadians are covered by registered pension plans,” she notes. And while the Canada Pension Plan (CPP) has seen enhancements, she adds that the full benefits won’t be realized for years, leaving today’s workers in a precarious position.
The business case for financial planning benefits has measurable outcomes, Staples says, highlighting the connection between financial stress and workplace productivity. "Employees who aren’t stressed about their family and finances are more productive, more focused, and more dedicated. Providing these tools are a benefit to employers as well."
Financial planning often comes with several barriers which isn’t easy to reduce the complexity of topics. Notably, concepts around budgeting, the value of deferred compensation, choosing retirement investments and retirement planning are difficult because Canadians are raising children, while continuing to pay off debt, Staples notes. As a solution, she suggests breaking down complex topics into manageable pieces and providing ongoing education that builds over time, as research suggests there’s “little to no value to one-and-done sessions.” She also advocates for repeated engagement and practical applications that allow employees to develop both the understanding and the skills to act on financial advice.
A well-structured financial education program can also mark the difference between immediate and deferred benefits. She explains many employees struggle to see the long-term value of retirement savings, especially as Canadians are more concerned than ever about living in the moment. "People just see an amount being removed from their paycheck. They don’t see a reduction in the taxes they’re paying because of the direct contribution. They don’t see the immediate return if the employer matches their contributions," she says.
Staples also highlights how employers can approach the logistics of offering these services. While some employee groups appreciate on-the-clock financial education sessions, which convey a sense of value and appreciation from the employer, she suggests there’s also merit in requiring take-home components to encourage discussions with spouses or partners, creating a more holistic impact.
As for who employers should work with to deliver these services, Staples stressed the importance of qualifications. "I think what employers need to do is know what credentials they’re looking for to deliver the education, and then find a service provider to do that," she says.
