The financial industry needs to make things simpler for clients in order to improve financial literacy across Canada, according to Joanne De Laurentiis, president and CEO of the Toronto-based Investment Funds Institute of Canada (IFIC)
“From a regulatory point of view,” said De Laurentiis, while speaking on a panel discussion on financial literacy hosted by the Economic Club of Canada in Toronto on Friday, “[we need to be] reducing the stock of material that gets handed off to individuals when making a financial decision or buying a financial product.”
The average person, she said, cannot understand the lengthy, legal-jargon-filled documents that come with an investment purchase. Instead the information needs to be presented in short, easy-to-read documents. The simplified forms should outline what it is the person is buying, the costs involved, the risk and what the product can do for his or her investment plan.
Of course, De Laurentiis said, people who want to access the expanded documents, such as analysts, should still be able to do so.
As well, a more financially literate public can help to strengthen client advisory relationships. For example, informed clients can have more robust conversations with advisors, said De Laurentiis, about their specific financial needs. These in depth conversations can in turn lead to increased savings and a higher level of wealth for the client.