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Guaranteed Result - Employee Financial Literacy Programs (GEL™)

What does financial literacy mean?

Financial literacy means that an individual has sufficient understanding of pensions; personal finances; income tax; debt and investing; so that he or she can make sound decisions that will help build long term financial security for them and their families.

What does the GEL™ program do?

The GEL™ program offers ‘financial literacy’ for employees with a money back guarantee. The money back guarantee is that upon completion of the 10 week program employees will be able to pass a financial literacy test administrated by company officials. The company only pays for the financial education of those employees who pass the test.

How does the basic program work?

The basic program consists of a series of 10 one hour seminars. In each seminar two financial concepts are explained. In the whole program 20 financial concepts will be explained to employees with the use of practical examples. Employees are given a workbook with exercises, examples, notes and illustrations and they also receive two books written by Warren MacKenzie (The Unbiased Advisor and The New Rules for Retirement).

How does the advanced literacy program work?

The advanced literacy program builds on the basic program and goes into greater depth in each of the topics covered in the basic program – plus it adds five additional topics. The advance program also involves personalized financial planning and retirement planning.

What financial literacy topics are tested in the basic program?

Employers choose the 20 topics that will be included in the basic program. The total list of possible choices includes 30 financial, investing, pension benefit and budgeting topics. In each session two topics are thoroughly explained and relevant examples are provided.

The financial literacy test has five multiple choice questions on each topic. If the employee achieves a mark of 60% or more, he or she is considered to have passed the financial literacy test.

Topics include the following:

  1. Understanding your company pension plan (if applicable)
  2. Understanding your group RRSP (if applicable)
  3. Understanding your share purchase plan (if applicable)
  4. Different types of investment products (stocks, bonds, preferred shares, GICs)
  5. Time value of money (inflation, interest rates and compounding)
  6. Income tax (how different types of income are taxed and how to minimize tax)
  7. Financial planning (how the process works, setting goals, understanding alternatives)
  8. The investing process (determining asset mix, rebalancing, following a strategy)
  9. Different types of risk (stock market risk, inflation risk, interest rate risk)
  10. Fees and commissions (MERs, hidden fees, fee based and commission based accounts)
  11. How the investing industry works (how advisors are paid, what you have to know)
  12. CPP and OAS (how much can you expect, who qualifies, the claw back, indexing)
  13. Personal budgeting (understanding the impact of saving and spending)
  14. Taking responsibility (no one cares as much as you do, schools don’t teach investing)
  15. Good debt and bad debt (cost of mortgages, credit cards, borrowing to invest)
  16. Tax sheltered savings programs (RRSP, RRIF, RESP, LIF, and LIRAs)
  17. Mutual funds (Cdn Equity, Bond, International Equity, advantages & disadvantages)
  18. Exchange traded funds (What are they? advantages and disadvantages)
  19. Monitoring results (How to monitor, what to look for, what questions to ask)
  20. Choosing between a lump sum and a life time pension. (Advantages of each approach)
  21. Active investing versus passive investing (pros and cons of trying to ‘beat the market’)
  22. Stock market history (how the market moves in cycles, what to expect when investing)

Corporations are opting for the GEL™ program for the following reasons:
  • They want a greater participation rate in their pension and benefit programs.
  • They want to fulfill their obligations under the Capital Accumulation Plan (CAP) guidelines.
  • They want to make it easier to hire and retain good employees.
  • They know that when employees are worrying about their finances they start to waste time looking for help from their associates or from the internet.
  • They want employees to make sensible and informed choices when they consider their options for pension and benefit plans.
  • Employees with their finances in order suffer less stress, are healthier and use less sick time and health services.
  • It is difficult for employees to concentrate on work when they are worried about their financial security.
  • Helping employees learn to handle their finances wisely is often more effective than giving them a raise.
  • Many employees do have financial concerns or problems which can be overcome with unbiased information. (The amount one earns is not as important a factor in achieving financial security as is the way one’s finances are managed).
  • They don’t want to subject employees to seminars delivered by commission salespeople who may deliver biased information that may not always be entirely in the best interest of the employee or the company.
  • When there is an option to invest in company shares – financially secure employees are able to buy more shares and therefore have a greater stake in the company’s success.
  • When individuals exercise personal responsibility and start to take control of their finances they are less likely to engage in destructive ‘escapism’ behaviours such as drinking and gambling.
  • Happy, healthy, focused and financially secure employees work more productively.

For more information or a copy of the actual literacy test contact info@secondopinions.ca