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Jane Rooney, Canada’s first financial literacy leader.

Christian Lalonde

The federal government is concerned enough about how seniors are managing their money that it has made them the top priority in improving the country's financial literacy.

Children and adults under age 65 will eventually be part of the government's efforts to teach Canadians to more effectively manage money. But the first phase of a recently launched consultation process on financial literacy focuses on seniors, the demographic with the most life experience with money.

Why target seniors first? To find out, I recently talked to Jane Rooney, appointed by the federal government in April as Canada's first financial literacy leader. Here's an edited transcript of our conversation:

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Many people believe that the focus of financial literacy should be teaching money skills in schools so that young people can avoid the mistakes of older Canadians. Why the emphasis on seniors?

We agree that financial literacy needs to be taught in schools, and it is being taught in all educational jurisdictions in Canada. The reason why we're focusing on seniors initially is a recent financial capabilities survey that shows they are having difficulty making financial decisions. Seniors are the fastest growing population of bankruptcies in Canada, and they're also where population growth is.

What are your financial literacy goals for seniors?

To help people plan ahead for their senior years, plan and manage their money within their senior years, protect their money against financial abuse and fraud, and better understand the government benefits that are available to them.

Seniors have lived a lifetime with money and they may have spent 40 or so years in the work force. Why haven't they got the message on money yet?

We're faced with a more complex financial services marketplace right now. There are many complicated decisions – moving your money from your registered retirement savings plan into a registered retirement income fund, for example. It's important for seniors to ask the right questions to make the decisions that best suit their needs.

What are the most notable examples of financial illiteracy you're seeing among seniors?

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Statistics show that people are entering their senior years with greater debt levels. The Office of the Superintendent of Bankruptcy has identified seniors as its greatest growing population of bankruptcies. I would say [the issue is] managing credit wisely and managing debt levels.

Isn't that a problem for the entire population?

There's definitely a problem with growing debt levels and a lack of saving for everyone.

Can you give us an example of how you propose to teach seniors things they quite frankly should have learned decades ago?

We're partnered with the Canadian Bankers Association to pilot a program for seniors with two modules for budgeting and fraud. The model is volunteer bankers going into seniors' homes and to non-profits to share their information.

Do you feel pressure to help make seniors more financially literate before the aging trend in our population really takes hold?

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Yes. That's why our consultation deals with near seniors and current seniors. It's very important to talk to people before they get into their senior years. Baby boomers are the most significant generation that needs this information.

What indicators will you use to decide whether financial literacy is improving among seniors?

We want to see increasing savings rates, increased usage of savings vehicles like the tax-free savings account and registered retirement savings plan. Debt levels need to go down, savings rates need to go up.

What about fraud – are seniors more at risk than the rest of the population?

It's a big problem and it's under-reported – we're hearing that from the police all the time. "Friendly fraud" (by a family member or associate) is very common, and that leads into why people don't want to report it. We're also hearing that people are isolated and therefore they accept the phone call from the fraudulent telemarketer.

There's a contrarian view on teaching financial literacy that it's not very effective at changing behaviour. What's your response to the doubters?

At [the Financial Consumer Agency of Canada], we have a program called Financial Basics. We found that people who took the program were more likely to stick to a budget, and that they chose different financial products. For example, among those who were tenants or renters, we found a greater incidence of purchasing tenant's insurance. There were very specific, tangible improvements in behaviour and attitude toward money.

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Curriculum vitae

Name: Jane Rooney

Title: Financial literacy leader

Job description: Strengthen the knowledge, skills and confidence of Canadians in dealing with financial matters; co-ordinate financial literacy initiatives with private, public and non-profit groups across the country.

Reports to: The Commissioner of the Financial Consumer Agency of Canada (FCAC), a federal government agency.

Previous job: Director of financial literacy and consumer education at the FCAC.

Notable achievements: She and her financial literacy team earned a 2010 Public Service Award of Excellence for The City, an online financial skills simulation that helps students learn about money.

Other job experience: Almost eight years as a policy analyst at the Canadian Payments Association.

Education: BA in economics from Carleton University.

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