- Originally from our sister publication, Advisor.ca.
Canadians award themselves a B on their level of financial literacy, but say they need to learn a great deal more, according to research from Investors Group.
While seniors (Canadians 65 and older) claim to be most knowledgeable about fundamental financial planning concepts, only 62% say they are comfortable about retirement planning.
Among those poised for this next life stage—Canadians 45-64 years—only half (50%) 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.”
Only three-out-of-ten (27%) claim to be well informed. More than four-in-10 (44%) 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 being intimidated by complexity of choices (39%), a lack of personal contacts to engage in discussion (30%) and lack of time (29%).
The report found 44% 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%) with their personal level of financial literacy, noted the study.
However, some Canadians appear to have their work cut out; they rank themselves as poor to average at saving money (60%), following a budget (59%), investing regularly (58%), or following a financial plan (61%).
Experience matters when it comes to being wise about finance affairs. Eighty-three percent of seniors say they are comfortable with cash flow management; 64% are comfortable with saving and investing decisions; 62% are comfortable making decisions about their retirement; and 62% say they have a comfortable understanding of their insurance needs.
Thirty-nine percent of younger Canadians (44 years and under) are intimidated by the complexity of financial planning choices available and 28% don’t know who to ask for information.
“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.”