REPEAT-Second Annual BMO Financial Literacy Report Card: Canadians
More Knowledgeable About Financial Terms in 2012
- Majority give themselves a passing grade in financial literacy
- Canadians most familiar with RRSPs, TFSAs and GICs; not as familiar
with DRIPs, ETFs and RDSPs
- Half feel their knowledge of financial concepts has improved since
the financial downturn of 2008
- Young Canadians least familiar with financial concepts
TORONTO, ONTARIO -- (Marketwire) -- 11/09/12 -- With Financial
Literacy Month in full swing, BMO Financial Group today released its
second annual BMO Financial Literacy Report Card which gauges the
personal finance knowledge and understanding of Canadians.
Much like 2011, most Canadians gave themselves a passing grade on
their level of personal finance knowledge, with nearly three-quarters
giving themselves a B or C. Only one-in-ten (10 per cent) believe
they deserved an A, while 3 per cent gave themselves a failing grade:
-- A = 10 per cent
-- B = 41 per cent
-- C = 33 per cent
-- D = 9 per cent
-- F = 3 per cent
The report, conducted by Pollara, also revealed that Canadians are
feeling more confident in their knowledge of various financial terms
compared to last year. Canadians feel most knowledgeable about:
-- Registered Retirement Savings Plan (RRSP) - 79 per cent; up from 69 per
-- Tax Free Savings Account (TFSA) - 72 per cent; up from 64 per cent
-- Guaranteed Investment Certificate (GIC) - 62 per cent; up from 60 per
Meanwhile, despite a notable increase in awareness, Canadians
continue to feel least knowledgeable about:
-- Registered Disability Savings Plan (RDSP) - 23 per cent; up from 15 per
-- Exchange Traded Funds (ETFs) - 24 per cent; up from 14 per cent
-- Dividend Reinvestment Plan (DRIP) - 25 per cent; up from 14 per cent
Interestingly, half (50 per cent) of Canadians say their financial
knowledge has increased since the financial downturn of 2008.
"Improving financial literacy among Canadians is critical to the
financial well-being of families, as well as the overall economy,"
said L. Jacques Menard, Chairman of BMO Nesbitt Burns and Financial
Literacy Task Force Vice-Chair. "Increasing financial literacy should
continue to be a focus for all involved, including financial
Mr. Menard added that BMO strongly supports the efforts and
recommendations put forth by the federal government, including the
Task Force on Financial Literacy and the introduction of the
Financial Literacy Leader Act last November.
Familiarity with Financial Concepts
As part of the research, Canadians were quizzed on three questions
related to common financial concepts:
-- Canadians are accurate in their belief that they deserve top marks for
their understanding of the RRSP, with 80 per cent correctly answering
that you only pay taxes on RRSP investments when they are withdrawn
-- The majority (68 per cent) recognize that weekly mortgage payments
enable a mortgage to be paid down sooner
-- Just over half (57 per cent) understand the benefits of compounded
However, according to the report's findings, a successful
understanding of the financial literacy quiz is tied to age, with the
majority (54 per cent) of those under 30 answering over half of the
questions incorrectly. Furthermore, nine-in-ten (87 per cent) of
young Canadians believe they would benefit from an introductory
course on personal finance.
"While it's encouraging to see that Canadians are feeling more
confident in their understanding of personal finance, there continues
to be room for improvement, particularly among younger Canadians,"
said Gary Rabbior, President, Canadian Foundation for Economic
Education (CFEE). "This underscores a need for financial literacy
programs targeted to younger age groups to ensure they have a solid
base of financial knowledge early on in life."
As a commitment to 'Making Money Make Sense', BMO is releasing a
financial tip each day throughout November in support of Financial
Literacy Month in Canada. To learn more about BMO's financial tips,
For more on financial literacy, Canadians can visit the Government of
Canada's Financial Literacy Month website, as well as BMO's Financial
Literacy online resource.
For more information on CFEE, please visit www.cfee.org.
The survey results cited in the 2012 Financial Literacy Report Card
conducted by Pollara are compiled from a random sample of 1,000
Canadians 18 years of age and over between October 25 and October 29,
2012. A probability sample of this size would yield results accurate
to +/- 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a
highly diversified North American financial services organization.
With total assets of $542 billion as at July 31, 2012, and more than
46,000 employees, BMO Financial Group provides a broad range of
retail banking, wealth management and investment banking products and
Jessica Park, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver
Press spacebar to pause and continue. Press esc to stop.