Mercer and Wealthsimple Inc. are teaming up to create a digital saving and investing platform for Canadian employees.
Mercer Invest Wise, which is a voluntary savings tool, is intended to be included in a total rewards package. Accessible online and as a mobile app, it allows employees to manage various savings and investment accounts, such as their tax-free savings accounts, registered retirement savings plans, registered education savings plans, as well as their workplace pensions.
Through a series of questions, Mercer Invest Wise determines at the outset the appropriate level of risk for an employee’s investments and then suggests which of its three portfolios is most compatible. The questions also help establish what the employee is saving for and which type of savings account would make sense, whether it be shoring up for their retirement or saving for a car or a child’s education.
The portfolios are predominantly made up of exchange-traded funds, says Jean-Philippe Provost, senior partner and wealth business leader at Mercer Canada.
Part of the reason the tool should appeal to employers, he adds, is that financial stress is one of the leading causes of absenteeism in the workplace and the platform aims to help address that issue. The program also provides direct access to financial advisors, either by phone or email.
Employers can also offer the platform at no cost, he says. And as far as investment fees are concerned, it’s an economical option for the end users as well. “Our fees are probably a third of the typical fees that an individual would end up paying in, say, a mutual fund.”
It can also help employees avoid gaps in their retirement contributions when they take extended leaves. When an employee takes extended periods off work, they usually pause contributions to their retirement savings plans, which can add up to a significant shortfall over time, says Provost, noting the program can help mitigate the deficit by encouraging saving and investing through other accounts outside the workplace.
Given the massive gap Canada is facing in retirement savings, it’s important to reach the average employee on this issue, he says. “Even the very large employers are saying, ‘We’ve realized we have four or five different generations in the workplace and these people have different savings goals.’ I think some of the plans that these organizations have in place are more traditional and don’t cater to providing that flexibility.”