[Matt] …record levels of debt held by governments. Individual Canadians are also carrying all sorts of debt. Many of us are taken by, what seems like, almost free money, certainly cheap money, and we can’t avoid taking out a mortgage, getting student loan, or buying on credit, given the high cost of living, every day. On top of that, not everyone feels confident figuring out a financial plan for the future to get out of debt. Planswell is launching its online engine, but it’s already got a waiting list. To tell us more about what it is that it’s trying to do, in terms of getting you out of debt, Eric Arnold, the CEO of this organization, is with us in studio, good morning.
[Eric] Thanks, Matt, good morning.
[Matt] How does your financial planning engine work?
[Eric] So, the problem that we’re finding is that, basically, nobody knows what they need to do on a monthly basis in order to achieve their goals in the future, primarily, to maintain their quality of life in retirement. The problem with that is the existing software, and the systems to get a financial plan are so cumbersome, that it generally costs thousands of dollars. So what we’ve done is built a fantastic piece of software that, in less than three or four minutes, people can create their own financial plan, and really be able to see into the future of what it’s gonna take.
[Matt] Do you have the sense that people have any degree of financial literacy right now, given the amount of debt that they’re carrying around with them?
[Eric] See, that’s another part of the problem. The financial plans that exist in the marketplace generally come out to 20 or 30 pages of charts and graphs, and even the advisors don’t really understand them. So the one that we’ve designed is actually one page, doesn’t include any charts or graphs, and tells you everything in very plain language of what you need to do.
[Matt] Why did you wanna get involved in this?
[Eric] So I started my career actually working at one of the big banks brokerages, and saw the need… The people that need the financial plan the most are the people with less net worth, and the bank was telling me, “You just can’t help those people, we won’t allow you.” And I was working on ways of getting people interested in building financial plans, and the demand was massive, so I just had to, kind of, proceed with figuring out how we can service all Canadians, instead of just the wealthiest of the wealthy.
[Matt] What are the biggest issues that are facing people today when it comes to understanding and dealing with the debt burden that they might be carrying?
[Eric] Well that was one of things, when we first started, is that we thought we were gonna make investment plans, talk about people’s insurance, going forward, and over a quarter of the people that were coming on to make financial plans with us were saying, “Yeah, that’s all great, but, “I’m within 10 years of retirement, “and I can’t save a dollar on a monthly basis.” So we needed to look into how can we help people with their debt as well?
[Matt] And so, what is the site going to do to be able to walk people through that?
[Eric] So you go through, and it’s a series of questions, about 30 or 40 questions, 10 seconds, each off the top of your head, and it’s gonna give you a plan based on what you’re doing today, how that can be reconfigured, and it’ll show you what that means for your future. We’re not in the business of telling people, “Drink less of a certain type of coffee.” Changing people’s behavior is a bit more of a challenge, but, what we’re in the business of doing is showing you somewhat of a crystal ball into the future based on what you’re doing today, and how that can be reconfigured without changing your lifestyle in order to achieve your goals.[Matt] Sorry, where’s the daylight in that? Because a lot of people say that, to be able to plot out your future, you do need to, to put it in your words, change the type of coffee that you’re drinking. You’re not spending $5 on a latte everyday, you understand what that costs, and then you try and reduce that expenditure down.
[Eric] Yeah, absolutely, you might see in your plan that it’s suggesting that you retire at the age of 71, instead of 65, and you might decide for yourself that you wanna cut down your spending a little bit, that might be a solution for you. But for some people, we just did a plan for a family last week. They had a significant amount of debt, and it was kind of burying them. Young family, young kids, they lived in their home in Toronto for about five years. And we found that, for them, refinancing their house, in order to take care of the credit card debt that had been piling-up, to free up some of the cashflow, so that they can start paying towards their future, as well as covering the insurance that was needed for their family, and planning for their kids’ education. We were able to sort the whole thing out without changing what they’re currently spending, when you take away that debt payment, and that interest payment.
[Matt] How much is this going to cost me?
[Eric] So the plans are free. You can make a plan in less than five minutes. You can walk away with that plan, and do whatever you like with it. We can also implement the plan for you, and because of the scale that we have, and the ways we have of connecting with people that are lower cost, we’re able to implement the plan for lower costs than any other business.
[Matt] Why should I trust you with my financial information?
[Eric] So we’re backed by a great team of advisors, people that have worked at the highest levels of multiple different industries. You can trust any financial institution in Canada–
[Matt] But part of this is about uploading it to a site that you’re creating, right, so…
[Eric] Yeah, absolutely. All of the banks are using kind of the same security technology. We’re actually at a little bit of a level higher, we have the medical grade kind of technology in our compliance, so, you can trust it.
[Matt] Just, finally, what are you hearing from colleagues around you about the need for something like this? A wider sense of financial literacy given the fact that, as I said, money is almost cheap, almost free, right now, it’s certainly cheap, and that, in addition to the high cost of living, is leading people to take on huge amounts of debt.
[Eric] Right, yeah, people need a plan. That’s the problem. Plans are so expensive to get. If we can give it to people for free, they can have a better idea of what they need to do going forward. So you can get it at Planswell.ca. Right now, we have a waiting list, as we said, the demand has been massive. You’re asking what the response has been. I’ve started a bunch of different kind of tech companies in my past, and I used to tell people about the idea, and they’d say, “Yeah, that’s a nice idea, “I could see how somebody would like that.” When I tell ’em about Planswell, every single person says, “I need that.” So it’s a message for sure.
[Matt] Interesting, good luck.
[Eric] Thank you very much.
[Matt] That’s Eric Arnold, CEO of Planswell, a company based here in Toronto, that is going to provide a free online engine for you to develop a financial plan. As you heard, there’s a waiting list for the site, as it yet to launch, when it does launch, we will tell you all about it at cbc.ca/metromorning.