November is Financial Literacy Month, and a shocking – or perhaps not-so-shocking – statistic has been released: in banks we trust.
A survey conducted for Bank of Montreal (BMO) by Pollara, indicates that Canadians turn to their bank first and most often for answers to financial questions. This is before seeking out a qualified financial advisor. More importantly, the younger the individual, the more trust is placed in their financial institution.
Here is how the numbers broke down: 1,000 people aged 18 and over were surveyed, with 56% of participants stating they would turn to their bank with a financial question first. Less than half of the respondents, at 47%, said they would even speak to a financial adviser, and only 39% would turn to friends and family with questions.
Those aged over 65 were least inclined to consult their bank (44%), and a whopping 63% of consumers aged 18 to 29 revealed their reliance on banks for financial information.
In my opinion, this poll illustrates two important trends: the first, and I am sure many of us are aware of this, is that banks have an excellent client retention rate, and have created a marketing structure designed to appeal to a younger more technologically savvy audience to force them to remain connected to the bank, and second; that the younger generation is less inclined to conduct adequate research on their financial options, and are succumbing to the concept of a bank as a hub of reliable, non-biased, information and financial support.
The duplicitous nature of a bank is that it provides you with products that it has created a want for. Although we all understand the subjective nature of supporting or promoting specific products or strategies, many consumers fail to realize that a bank is beholden to its shareholders, who are keen on increased profits and margins. This means that products, promotions, marketing etc. is designed to direct patrons to specific products the bank offers.
It is important to recognize the distinction between an individual bank employee and the bank itself: the employee has a limited fiduciary responsibility to the patron, but that responsibility fits within the mold of the bank itself. An employee is not required to recommend or disclose competitors’ products that may be more suited to a patron’s needs, just what their particular institution is able to offer. This is understandable, but an important distinction.
Although banks are a cornerstone of the financial markets, and as a whole, the economy, it is important for Canadians, especially young Canadians, to recognize the benefit of having a diverse financial support system that includes financial advisors, banks, family and more.
Regardless, if you’re thinking about making a switch, purchasing a home, or refinancing your mortgage, contact your REALTOR® & Mortgage Broker, or feel free to give me a shout, and I’ll be happy to chat.
REALTOR® and Senior Private Loan Specialist - Residential & Commercial
Century 21 Desert Hills Realty and EQ Lending Corp.
Broker/Owner of EQ Lending Corp.