Most Canadians (85%) rate their financial knowledge as average or above, but only 61% are able to answer five of seven (70%) financial knowledge questions correctly.

So says a progress report from the Financial Consumer Agency of Canada (FCAC) on the country’s financial literacy research plan for 2016-2018.

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The report, released Thursday, offers a collection of data on the financial well-being of Canadians. It also looks at how to advance national efforts to boost people’s knowledge.

While Canada ranks third globally on financial knowledge, attitudes and behaviour, according to a 2015 OECD/INFE survey, money remains the main source of stress for many families, the report says.

For example, one FPSC study from 2014 found 42% of respondents said financial anxiety was more stressful than work, health and family worries, while a study conducted by Manulife and Ipsos Reid revealed people who save, have financial plans and manage their debt are more engaged (22%), more likely to enjoy work (21%) and more motivated (18%).

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To help more people reach that level of satisfaction, workplaces can offer more assistance. After all, that’s where people spend the most time, the report says. It suggests “financial literacy messaging can be integrated in pension and benefit information, through human resources and employee assistance programs, and in training or education initiatives.”

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The main source of Canadians’ planning knowledge is advisors, however, says the report—even while 59% of people polled in a CPA 2017 survey of employees in Canada said they’d prefer to learn about retirement planning through workplace-provided programs.

FCAC found through that survey that 22% of respondents received retirement advice from an advisor versus from banks or family and friends (16% for both).

To better measure how people are willing to learn, the FCAC wants to advance “evidence-based research on financial literacy,” it says in a press release. Its progress report “was preceded by the release of Canada’s National Research Plan on Financial Literacy 2016-2018, and the formation of the National Research Sub-Committee […].”

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FCAC’s projects, goals

One of the consumer’s agency’s goals is to clarify what financial well-being means. As the progress report says, “[…] we can measure financial knowledge, skills and confidence through the [Canadian Financial Capability Survey, which will be done again in 2019], however, financial well-being has never been explicitly defined, nor is there a standard way to measure it.”

FCAC is looking to models in the U.S., including the Consumer Financial Protection Bureau’s framework for “defining and measuring success in financial education by delivering a proposed definition of financial well-being, and insight into the factors that contribute to it.”

As well, the agency is working with experts like England-based Dr. Elaine Kempson from of the University of Bristol. Along with colleagues, she developed a conceptual model and preliminary analysis of financial well-being in 2016, the report notes. FCAC wants to replicate this in Canada, which will lead to “a Canadian-adapted survey [that] will be administered online in early 2018.”

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Additional findings in the report

  • Indigenous Peoples face unique barriers to their financial well-being. These barriers need to be addressed in the design, delivery and measurement of financial literacy interventions.
  • Financial knowledge on its own is not enough to lead to financially desirable behaviours. Financial confidence is a key complementary factor that contributes to financial behaviours and financial well-being.
  • It’s important for students to learn to manage money early in life. For example, students who have bank accounts and discuss money matters with their parents, once or twice a week, score better on financial literacy assessments.
  • Targeted financial literacy tools delivered through mobile apps help increase knowledge and confidence related to budgeting among non-budgeters.