Improving financial literacy in Canada requires not only more education, but motivating individuals to change their behaviours, experts said on Tuesday.

At the Investment Funds Institute of Canada’s Financial Literacy Forum in Toronto, speakers pointed to research showing that even when individuals are given information, they don’t necessarily use it.

“People are bombarded with information,” said Laurie Campbell, executive director of Credit Canada and a member of the Task Force on Financial Literacy, “but unfortunately a lot of it doesn’t resonate.”

Often, she said information doesn’t sink in until individuals truly understand why it’s important.

“We have to show them the consequences of actions,” she said.

Gary Rabbior, president of the Canadian Foundation for Economic Education, agreed that education isn’t sufficient. So far in the quest to improve financial literacy, he said too many resources have been focused on transferring knowledge.

“All of the evidence is showing that it doesn’t work,” he said. “We could be wasting time, we could be wasting effort, and millions upon millions of dollars.”

Indeed, surveys conducted by the Canadian Securities Administrators show that many Canadians who are knowledgeable on financial matters still make poor financial decisions.

Tamara Van Brunt, director of communications and investor education at the Alberta Securities Commission, pointed to survey results showing that while 82% of Canadians believe it’s important to research before they invest, 50% didn’t conduct any research before purchasing their last investment. Furthermore, 64% of Canadians believe it’s important to have a financial plan, but only one quarter actually do.

“While they know what they should be doing …a significant number are just not behaving that way,” Van Brunt said. “We need to get Canadians to act on these beliefs.”

Rabbior said it’s critical to find ways of influencing Canadians’ behaviour. For example, he suggested using incentives for Canadians to make responsible financial decisions. He said there are too many incentives for Canadians to spend, such as low interest rates and credit card reward points.

“We need more incentives…if we want Canadians to save more and spend less,” he said.

He applauded the Tax Free Savings Account as one initiative that encourages Canadians to save.

Campbell suggested influencing behaviour by helping individuals understand the consequences of poor decisions and the benefits of smart decisions that arise at different stages of their lives.

“The life events approach is very relevant,” she said, pointing to such life milestones as starting a job, getting married, having children and retiring.

Campbell said that the Task Force on Financial Literacy is in the final stages of its deliberations, and plans to present its recommendations to Finance Minister Jim Flaherty in mid-December. The recommendations will likely become public in late January.

IE