But many people relying on family, friends for advice
Many Canadians may not be getting reliable information about financial wellbeing, which leads to greater stress, according to a report from LifeWorks.
More than a third (37 per cent) rely on family members as their primary source of financial information, while 20 per cent rely on friends and 11 per cent rely on social media.
In contrast, 40 per cent of respondents rely on a financial advisor, found the survey of 3,000 respondents conducted from March 22 to April 2.
But their Financial Wellbeing Index (FWI) scores line up accordingly, at +4.7 for those who rely on a financial advisor compared to -5.8 for those who rely on family, -7.2 for friends and -7.3 for social media.
The index is a measure of deviation from the benchmark of the financial wellbeing of the population which reflects data collected in 2017, 2018 and 2019.
“Canadians are still feeling the impact of the pandemic on their financial situation,” says Idan Shlesinger, president of retirement solutions and executive vice president at LifeWorks. “While some Canadians have successfully managed their finances during the pandemic, better education is needed to help them plan for the future and overcome the financial challenges they may be facing due to the pandemic. The first step of helping Canadians to improve their financial health is to provide reliable sources of information.”
Overall, Canadians’ financial wellbeing score in April is -2.2, a slight improvement from the -2.8 score recorded previously. Managers have slightly lower financial wellbeing (-2.1) than non-managers (-1.7), finds LifeWorks.
Financial wellbeing scores improve with age; the least favourable is among 20 to 29-year-olds (-11.0) while the most favourable is among 70 to 79-year-olds (7.1).
More than half (54 per cent) of Canadians have no or limited emergency savings, and 30 per cent indicate that their financial situation is currently impacting their work productivity.
“Financial wellbeing has been shown to make a difference between those who are faring better in their mental health than those who are not,” says Paula Allen, global leader and senior vice president, research and total wellbeing at LifeWorks. “Employers are often unaware of the challenges faced in the workforce. There are people over the age of 50 with no emergency savings and others who prefer to go beyond only saving through pension plans. It is essential to provide a system that offers more personalized options.”
More than half (56 per cent) of Canadians indicate some barrier to increasing their financial knowledge, including lack of time and not knowing where to look.
When it comes to financial wellness, employers are sending out mixed messages, judging by a recent survey. While many are accelerating their strategy to improve the financial wellbeing of employees, 25 per cent are decelerating that strategy.
“There is an increasing expectation for companies to provide income stability to their employees, especially in recent times,” and employers stand to benefit when they provide financial wellness supports for their workers, according to Randstad.
“Employees are more likely to stay loyal to their employers to continue enjoying access to financial support programs. And through these programs, they may improve their financial literacy which will be useful to their jobs and find themselves bringing home a bigger income. At the same time, companies can benefit from having a workforce that has good financial knowledge, as they become more efficient in budgeting and financial planning.”