In the past, I have written many articles on how important it is to work with a financial advisor. A big reason to this is that an advisor knows all the ins and outs of the financial world. It is their field of expertise, to which they have all the tools needed to assist individuals or families in providing guidance to achieve their goals and objectives.
I recently found an article that highlights my point on the importance of having an advisor. The article relates to Canadians and their overall financial literacy. I have highlighted many of the points in the article below. This is a very interesting piece of information. Please take the time to review.
Canadians Greatly Overestimate Their Financial Literacy Skills - More than half of Canadians fail tests of common financial questions:
Canadians may be overestimating their financial literacy skills. A majority of Canadians (78%) said they are financially literate, but when tested on their knowledge with a series of questions, nearly 6 in 10 failed to make the grade.
The quiz consisted of 15 true or false questions and the results suggest that Canadians are especially unclear about terminology concerning mortgages, auto insurance and tax-free savings accounts (TFSAs). Even of those surveyed who passed, most only attained a C or D grade.
"Men were significantly more likely than women to believe they were financially literate – 84% rating themselves as excellent or good, compared to 73% of women. Canadians who rated their financial literacy high were more likely to pass the quiz but even so, fewer than half of them passed the test."
Baby boomers (52%) and Gen Xers (45%) were more likely to pass than Millennials (31%). While Millennials were more likely to rate their financial literacy as excellent, they were the generation most likely to fail the quiz.
The survey showed strong financial literacy correlated with more educated Canadians. Nearly nine in 10 (87%) of university graduates describe their financial literacy as either excellent or good, compared to 77% of those with a high school diploma.
"Our financial literacy test is more than just understanding how to balance a cheque book and the questions are based on common questions asked by our site users," explains Thouin. "There are misconceptions out there, so we want to provide correct information about every day financial decisions like mortgage and car insurance to help people make the right choices."
I ask this question to you: For those who struggle with or are unaware of their financial literacy (Remember nearly 6 in 10 Canadians), what happens to them when they don't have an advisor? Are they making the right decisions or the wrong decisions in regard to their financial situation? Imagine where they would be working with an advisor?
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About the Survey These are some of the findings of an Ipsos poll conducted between May 18 and May 23, 2017. For this survey, a sample of 1,001 Canadians aged 18+ from Ipsos' online panel was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±3.5 percentage points, 19 times out of 20, had all Canadian drivers been polled.