Some of Canada’s largest companies in the financial industry have teamed up with charity Prosper Canada and the City of Toronto to offer free financial coaching programs to low-income residents.
The MPower Money Coaching pilot program was developed by Prosper Canada and is being delivered in partnership with the city’s Employment and Social Services division. Over the next year, 50 volunteer financial advisors will support 100 people living on low incomes to set personal financial goals, establish a realistic action plan, and to acquire financial knowledge and skills.
“We know from research evidence that financial coaching is a highly effective intervention that results in measurable improvements in financial well-being over time,” said Elizabeth Mulholland, Prosper Canada’s CEO at an event on Wednesday announcing the program’s launch.
A report by NeighborWorks America and the Citi Foundation found financial coaching helped a large number of low- and middle-income families: 55% of those with unsecured debt decreased their debt by a median amount of $3,005, 54% of those with no prior savings achieved a median savings of $668, and 47% increased their credit scores by an average of 59 points.
Toronto has offered a financial literacy workshop, which was developed in partnership with Prosper Canada, for a few years. Phil Eisler, director of Employment of Social Services, believes the one-year pilot program is a welcome component of its poverty reduction strategy.
“By helping people on limited incomes access objective money management information, and develop good financial management skills, we are taking significant strides towards helping participants effectively manage their money, build confidence and plan for their futures,” he said.
The collaboration between Toronto, Prosper Canada, and a consortium of investment firms and financial planning associations is “phenomenal,” said Jane Rooney, Canada’s financial literacy leader.
She added that the program directly supports the first two goals of the national financial literacy strategy: manage money and debt wisely and save for the future.
“Financial well-being is a shared responsibility,” Rooney said. “By collaborating, I think we can have a broader reach.”
Read: Canada launches national financial literacy strategy
The investment firms and financial planning associations supporting the program are: AGF, Bridgehouse Asset Managers, Dynamic Funds, Franklin Templeton Investments, IA Clarington, Sun Life Global Investments, Zavitz Insurance, the Investment Funds Institute of Canada, Advocis, the Fianancial Planning Standards Council, and the Independent Financial Brokers of Canada.