Canadians still have trouble planning for their financial futures. Financial planners across the nation find getting people interested in drafting plans – and then getting clients to act on those plans  – are the two most significant barriers.

Those two gaps, inattention and inaction, are the focus of a new report from the Behavioural Economics in Action Research Centre at the Rotman School (BEAR) at the University of Toronto. Why do People Fail to Act on Financial Plans? A Behavioural Lens on Financial Planning is the first published output of the Behaviourally Informed Organizations partnership project announced earlier this year. The partnership includes 18 partner organizations, including the Consumers Council of Canada.

The report notes that there are two major “gaps” that lead to Canadians failing to implement financial plans. The first are the potential clients that would like to get plans but fail to do so. The report identifies five causes of this gap, from procrastination to the benefits being too abstract. The bulk of the report looks at the second gap, an “implementation gap” in which clients have written plans, but fail to act upon them. This gap has seven causes, many of which are similar to the causes of inaction, but also include overchoice and information complexity.

Clients typically fall into a number of categories. The report helps financial planners understand the behavioural foundations of these consumers, and uses relevant behavioural science to propose some recommendations to address the implementation gap. One category, “naive intenders”, do not need additional education or evidence, for example. They simply need help making things happen.

The Behaviourally Informed Organizations (BI-Org) partnership also released Seeing Sludge, a separate report on context variables that impede rather than facilitate consumers.