Five Questions with Andrew Lo, CEO of Embark

Embark is a leading Canadian education savings provider dedicated to helping families plan and save for their children’s post-secondary education.

President & CEO Andrew Lo recently sat down with CCI President Benjamin Bergen to discuss Embark’s innovative approach to education savings, the challenges facing Canadian families, and how the financial landscape can evolve to better support future generations.

This transcript has been edited for length and clarity.

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Benjamin Bergen: Andrew, thank you for joining me. I'm curious to hear about the inspiration behind Embark, and what led to its creation?

Andrew Lo: Of course! Embark is an education savings and planning company. The main tool we use to help families is the Registered Education Savings Plan (RESP).

Research shows less than half of eligible Canadians are participating in RESP programs, meaning they are missing out on vital savings benefits, like government grants, or as I refer to them, free money. There are grants out there available to all Canadians, like the Canada Education Savings Grant, which you can get for just saving in an RESP. Essentially, the government matches 20 per cent of your contributions, up to a maximum of $500 a year and $7,200 over the life of your plan. If you take advantage of this early on, your savings can benefit from compound growth, giving you even more for their education. That’s why it’s so important for all Canadians to start saving using this tool and start using it as soon as possible.

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BB: That’s a really great overview of the incentives out there for students and parents looking to save for post-secondary education. So, what made you join Embark? Obviously, you came in as a CEO after the creation of the company. What made you realize that there was a large FinTech opportunity here?

AL: I joined Embark about a year and a half ago to really transform the company and help more students get to post-secondary school. By embracing financial technology and creating an intuitive post-secondary planning and savings ecosystem, we're helping students and parents build for the future and navigate through their journey in a way that’s best for them.

One of the things that fascinated me was the opportunity to really disrupt this space. Traditional RESPs can be quite complex and usually require a lot of in-person and analog management; it's not very scalable or modern. I recognized this as an opportunity to come in and change the experience, building awareness of the RESP as a highly accessible and tailored tool that helps your child get a post-secondary education.

If you look at my background, I love being involved in FinTech companies that change the way consumers save or borrow money. The RESP is one of those ways to save money that I want to get out there, change the experience, and make more accessible for the half of Canadians who aren’t participating already.

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BB: That's Great! There is obviously this opportunity, and financial planning can be very overwhelming for many Canadians. Can you talk me through how Embark makes this process easier for families and students?

AL: We have a lot of content on Embark.ca that explains the process. We’re finding that investment advisors and planners usually stick to RRSPs and TFSAs and don’t focus on the RESP category, because the asset is small relative to other portfolios they could bring on. Because of that, we find that there isn’t a lot of expertise families can access to help with a complex problem like saving for education.

Our process is simple: you can create an RESP online using our platform in minutes. We handle all the administrative tasks, including automating the application process and finding all grant opportunities for you. Users can contribute any amount that works for them, even as little as five dollars, and we can help them electronically create a plan based on expected costs, their needs and how much they’d like to pay when their child goes to school. We aim to simplify the process, remove all the complexity for families, and help students build their wealth to pursue their dreams in post-secondary education.

BB: That’s great. As someone who worked through university and had student loans, I didn’t know that these types of benefits were out there. In terms of Embark being structured as a non-profit, it's interesting to see a FinTech structured like that in this space. Could you speak on how this influences Embark’s decision-making?

AL: Embark is owned by the Embark Student Foundation, which is focused on making education planning and saving more accessible for all. To achieve this, we do a lot of philanthropic work.

One of our key initiatives is a student scholarship program, available for all subscribers to apply to, which provides an additional boost towards post-secondary education. We're expanding this program further this year.

We also do a lot on the institutional side for Canadian families. Last year, through our Major Grants Program, we donated $2.7 million to seven post-secondary schools in support of student wellness and student experience. We invite academic institutions across Canada to apply and we receive some truly outstanding applications. One example is Niagara College, which helps Indigenous students access post-secondary education by creating safe spaces and offering scholarships. I recently attended their first Indigenous Student Award ceremony.

Other supported programs include Vancouver Island’s campus food security initiative, which ensures students have access to nutritious food. You know, according to our latest poll of Canadian students, many are spending the lion’s share of their money on tuition, and they don’t have a lot of money for food and other important living expenses. So, we're helping there.

Another example is our support for Toronto Metropolitan University's DMZ. We're helping fund their Basecamp program, which introduces both high school and university students to innovation and entrepreneurship. The winning startup receives seed money from the funds we've provided. These initiatives are just some ways we're using our profits to bolster the education system and increase accessibility.

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BB: That’s awesome to hear. It’s fantastic Embark is showing leadership in addressing these challenges, especially when it’s so concerning to hear that students are struggling with hunger due to the rising costs of living and tuition. In terms of financial opportunities and advancements, are there any technologies or changes to the ecosystem currently being developed or in the pipeline that you're particularly excited about that could further support Embark?

AL: Absolutely. We're grateful to have companies like Flinks helping us facilitate deposits through bank accounts, which has been really helpful, particularly in the context of open banking. We're currently working through challenges related to payment processing, especially around gift carding. It would be easier with open banking, but we have a team that carefully considers the best approach, especially to prevent fraud and money laundering.

Additionally, with the help of CCI, we've made connections with the government to modernize the RESP program. Grant amounts and maximum allowable contribution limits haven't been updated for decades – the current $50,000 lifetime contribution cap per child is likely insufficient for future post-secondary costs. We believe this cap should be reassessed, as the cost of education is expected to rise significantly in coming years.

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About the Council

The Council of Canadian Innovators is a national business council of more than 150 scale-up technology companies headquartered in Canada. Our members are job-creators, philanthropists and leading commercialization experts in the 21st century digital economy.