By Scott Ronalds

The Task Force on Financial Literacy is a federal government initiative aimed at strengthening the financial literacy of Canadians. The Task Force, which is comprised of 13 members, was appointed in June 2009 (as part of the federal budget), and will provide advice and recommendations to the Minister of Finance on a national strategy to strengthen and promote financial literacy.

The Task Force is encouraging Canadians to communicate their thoughts and suggestions through a series of online and public forums. Their public consultation process recently ended, and the group will submit a report by the end of the year to the Minister of Finance that recommends a national strategy and course of action.

Steadyhand submitted a brief proposal with two simple recommendations:

• Require all statements provided by investment providers to include information on how much the client has paid the provider – in dollar terms and as a percentage of their total invested assets – over the reporting period.
  
• Require all statements to also include relevant information on how the client’s investments have performed. All investment providers should be required to show rates of return at the account and consolidated portfolio level. Performance figures should be provided for the same time periods that mutual funds are required to publish their returns (e.g., 3 months, 1 year, 3 years, 5 years, 10 years, and since inception).

We believe strongly that transparency is a critical element of financial literacy. Specifically, individuals need to clearly understand their costs associated with investing and how their accounts have performed. To be blunt, our industry’s reporting practices and standards with respect to these measures are awful. Greater transparency would go far in improving financial literacy.

You can read our full submission here.