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rob carrick

The financial crisis of the past year is the trauma that keeps on giving, and Monday offered up a vintage moment.

We started with Canada Savings Bonds (CSBs) coming out with an interest rate of just 0.4 per cent for this year. You know we're in troubled times when the rate on a savings product like this rounds down to zero.

Next, we had a group representing provincial securities regulators issuing the results of a study indicating that people aren't doing nearly enough to secure their financial future. Headline finding: 85 per cent of Canadians think it's important to build their personal savings and investments, but 35 per cent don't have any savings or investments.

Thank you, financial crisis. We can't save properly because interest rates are so low, and what savings we have are being strained by unemployment, high debt loads and other stresses related to the recession.

Troubled times, for sure. Now, let's snap out of it.

First off, forget about those ridiculous CSBs and find yourself a bank, trust company or credit union offering a high-rate, no-fee savings account with a rate between 1 and 2 per cent. You've got deposit insurance with all of these accounts, so there's no reason to cling to CSBs. They're dinosaurs, and that also applies to Canada Premium Bonds, which pay 1, 1.4 and 1.8 per cent over the next three years.

Now, for some perspective on the findings of the 2009 Investor Index produced by the Canadian Securities Administrators (CSA), which is made up of provincial and territorial securities commissions. The thrust of this study is to give investors like you a kick in the butt so you get more involved in your own financial situation.

That's a worthy cause, but people are already on it. I've been writing this column for close to 11 years and I have never seen such demand for hard, factual information about investments, mortgages, bank accounts, ways to save and so forth.

Our online discussions on financial topics are drawing huge numbers of questions. Check out the list of the most widely read stories on, and on - you will often see personal finance and investing stories ranked near the top.

The financial crisis has prompted people to ask questions like never before. That's why it's hard to get too worried about the CSA's finding that while 80 per cent of people believe it's their job to learn how to make sound financial decisions, only 32 per cent have actually sought information about investing. Something doesn't compute here.

The CSA has uncovered other deficiencies, but these numbers say more about the financial industry than they do about individuals. For example, just 46 per cent of people say they have a financial adviser, and only 25 per cent have a formal, written financial plan.

Now, why would this be? Because of ignorant investors who don't know enough to go and get some financial help? Or because we have an investment industry that is so based on selling products that it has polluted the idea of financial advice?

Let's say you wanted to find an adviser who would write you up a comprehensive financial plan. G-o-o-o-d luck with that. Advisers are ubiquitous - in your bank, in the strip mall where you buy milk, in the office building where you work and lots of other places - but how do you differentiate between the ones who are nothing more than product salespeople and those who deal in true financial advice?

The answer is by carefully interviewing advisers, not through any professional standards that advice providers themselves apply to their profession. Regulators in Britain have taken advantage of crisis conditions in the financial industry to announce that the practice of charging for investment advice through commissions on products will end in 2012. Why not here in Canada, too?

The CSA issued its findings to mark the beginning of Investor Education Month. As it happens, the Financial Planners Standards Council has declared this to be Financial Planning Week. These events are normally meaningless - just busywork for public relations staff.

This year is special, though. We're in the midst of a financial trauma that isn't over yet, and investors need help. How can they make decent returns when they're sick of the stock market's volatility and interest rates are low enough to produce a CSB rate of 0.4 per cent? How can they find more money to save and invest when their debt levels are high and they have little or no job security?

For people who want to find their own solutions, there are resources like the ones we're providing here. For those who want advice, there's a financial industry that puts selling products first. Let's get something done about that. Stay tuned to this column for some ideas.

Investor Insights Here are some highlights of the 2009 Investor Index, which is based on online interviews with 6,319 adults in July. The study was commissioned by the Canadian Securities Administrators, a group made up of provincial securities regulators:

  • 60 per cent of respondents were worried they didn't have enough for retirement
  • 56 per cent had confidence in their ability to make investment decisions.
  • 75 per cent knew where to go to get information to help them make investing decisions.
  • 32 per cent said they have sought information about investing in the past year.
  • 3 per cent expect a negative return in the next 12 months
  • 10 per cent expect more than a 10 per cent return.