Canadians grade themselves as B students in financial literacy but stumble over learning blocks

WINNIPEG, Nov. 9, 2011 /CNW/ - According to the latest research from Investors Group, Canadians give themselves a B on their level of financial literacy. Despite the good grade, 47 per cent are not satisfied with it.

While seniors (Canadians 65 and older) claim to be most knowledgeable about fundamental financial planning concepts, only 62 percent say they are comfortable about retirement planning. Among those poised for this next life stage (Canadians 45-64 years), only half (50 per cent) are comfortable with the knowledge they have on this topic area.

"If the student gives themselves a B, it means there is room for more learning," said Debbie Ammeter, Vice-President, Investors Group. "We all need to understand the when, where and how of financial literacy."

"The federal task force defined financial literacy as increasing the knowledge, skills and confidence of Canadians to make responsible financial decisions. The report added that there will be teachable moments in the progression of people's lives where we can all do more work," added Ammeter.

The new research was conducted by Harris Decima Research for Investors Group in conjunction with Financial Literacy Month to gauge Canadians' understanding, interest and action in obtaining financial knowledge.

You don't know what you don't know

Despite the self-awarded B grade, less than half (47 per cent) of Canadians say they have enough financial knowledge. Only three-out-of-ten (27 per cent) claim to be well informed. More than four-in-ten (44 per cent) Canadians say they find financial planning topics confusing.

"The truth is that all of us learn as we go to some extent," said Ammeter. "Every important life stage and milestone requires a different investment and personal finance strategy to help you achieve your goals."

Not having enough money to make financial planning meaningful is cited by 53% of respondents as a reason why they have not tried to learn more about financial topics. Other major barriers to learning about financial planning and investing were identified as:

  • Intimidated by complexity of choices (39 per cent)
  • No personal contacts to engage in discussion (30 per cent)
  • Lack of time (29 per cent)

Value of advice

Forty-four per cent of Canadians feel the best way to gain financial knowledge is by seeking the advice of a professional financial advisor. Canadians who have financial advisors are most likely to say they are satisfied (60 per cent) with their personal level of financial literacy.

However, some Canadians appear to be deviating from the lesson plan: they rank themselves as poor to average at saving money (60 per cent), following a budget (59 per cent), investing regularly (58 per cent), or following a financial plan (61 per cent). Seventeen per cent admit that they are influenced by impulses or emotions.

Older may be wiser

Experience matters when it comes to managing and understanding your personal finances. Eighty-three per cent of seniors say they are comfortable with cash flow management; 64 per cent are comfortable with saving and investing decisions; 62 per cent are comfortable making decisions about their retirement; and 62 per cent say they have a comfortable understanding of their insurance needs.

Younger Canadians (44 years and under) are the most likely group to be intimidated by the complexity of financial planning choices available (39 per cent) and 28 per cent don't know who to ask for information.

How to learn

A significant number of Canadians appear to be taking the long-term approach to gaining financial knowledge - nearly half (47 per cent) say they want to receive financial information on an ongoing basis. In addition, eighteen per cent say they would like to receive information well in advance of making a financial decision. In contrast, twenty-two per cent say they want information only when it's applicable to their immediate needs.

"Learning how to budget, save and invest at an early age lays the foundation that is vital for the rest of your life," said Ammeter. "The key is what you do with the information you gather - how you put it into action. Don't be afraid to seek advice when you need it."

Some Financial Literacy Fast Facts

  • 86 per cent of Canadians say they are very good or excellent at paying bills on time;
  • Only one-third (32 per cent) are happy with what they save or invest regularly;
  • 68 per cent of Canadians say they do not or can not afford to save or invest;
  • 28 per cent of women admit they are in the dark or need to understand more when it comes to their financial knowledge (versus 21 percent of men who feel this way).

More infographics, regional highlights and information are available at Investors Group's Media RoomKevin Regan, Executive Vice President, Financial Services, Investors Group shares some insights into financial literacy and how it impacts Canadians in their daily lives on YouTube.

About the Survey Methodology

These data were collected through an online panel survey between October 20 and November 1, 2011.  In total, 2503 surveys were completed nationally.  Online panel surveys are non-probability samples and thus margin of error cannot be calculated.  For this particular survey, standard weighting was applied to gender and regions within Canada, while weighting for age was split between those over and under the age of 55.

About Investors Group

Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of approximately 4,600 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and other financial services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's premier financial services companies with over $121 billion as of October 31, 2011, in total assets under management.

SOURCE Investors Group Inc.

For further information:

Ron Arnst 
Investors Group 
(204) 956-3364 
ron.arnst@investorsgroup.com

Teresa Pagnutti or Lisa Mills
Environics Communications
416-969-2721/ 416-969-2831
tpagnutti@environicspr.com/lmills@environicspr.com

For more media information, please see: Investors Group's Media Room, follow @Investors_Group on Twitter or connect on Facebook.

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Investors Group Inc.

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