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Financial Literacy - Canada - July 2018

“A concerted effort from government, industry, the school systems and the general public is required to improve the financial literacy of Canadians as its importance has perhaps not sufficiently caught on in the public consciousness.”

– Sanjay Sharma, Senior Financial Services Analyst

This report examines the following issues:

  • Only 6% of Canadians are unbanked
  • Rising cost of education makes student loans the top financial challenge
  • Online courses are of most interest to Canadians
  • Older Canadians are careful financial managers

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Only 6% of Canadians are unbanked
                • Figure 1: Ownership of financial products, May 2018
              • Rising cost of education makes student loans the top financial challenge
                • Figure 2: Financial challenges, May 2018
              • Online courses are of most interest to Canadians
                • Figure 3: Interest in methods of financial education, May 2018
              • Older Canadians are careful financial managers
                • Figure 4: Attitudes related to budgeting (% agree), by age, May 2018
              • The opportunities
                • Better financial literacy can help young Canadians
                  • Figure 5: Financial challenges, by age, May 2018
                • One in five parents are interested in financial apps for their children
                  • Figure 6: Agreement with “I have an emergency savings account that equals at least 3 months of my household income”, men vs women 18-34, May 2018
                • Parents with young children are financially stressed
                  • Figure 7: Attitudes related to budgeting (% agree), parents vs non-parents, May 2018
                • What it means
                • Market Factors – What You Need to Know

                  • Canada’s population is ageing
                    • Diminished capacity among seniors has consequences
                      • Immigration drives Canada’s population growth
                        • Financial literacy initiatives rolling out across Canada
                          • Advocis helping Canadians build financial savvy to shape their futures
                          • Market Factors

                            • Canada’s population is ageing
                              • Figure 8: Population aged 0-14 and 65+, as of 1 July 1995-2035*
                            • Diminished capacity among seniors impacts their financial literacy
                              • Immigration and financial literacy
                                • Figure 9: Population growth, 1985/86-2015/16
                              • Financial literacy initiatives rolling out across Canada
                                • New programme builds on Manitoba’s success in financial education
                                  • Ontario launches plan to teach high school kids financial skills
                                    • Advocis helping Canadians build financial savvy to shape their futures
                                    • Industry Developments and Innovations – What You Need to Know

                                      • Mylo and financial rounding apps
                                        • BlackRock invests in Acorns
                                          • Mogo reaches 600,000 members
                                            • Credit Karma launches Canada's first free credit monitoring service
                                              • Caution urged for Canadians investing with crypto-asset trading platforms
                                              • Industry Developments and Innovations

                                                • Mylo and financial rounding apps
                                                  • Other apps
                                                    • BlackRock invests in Acorns; Acorns integrates with PayPal
                                                      • Mogo reaches 600,000 members
                                                        • Bank of Canada partners with Creative Destruction Lab
                                                          • Caution urged for investing with crypto-asset trading platforms
                                                            • Credit Karma launches Canada's first free credit monitoring service
                                                              • LendingArch’s new rate comparison technology
                                                              • Key Players – Marketing Campaigns

                                                                • Kick start your training with Finfit
                                                                  • Figure 10: RBC’s Finfit email, April 2018
                                                                • Ally Bank announces a new debit card for kids
                                                                  • Acorns Later, a new retirement planning tool from Acorns
                                                                    • Figure 11: Acorns Later, May 2018
                                                                  • Erica
                                                                    • Figure 12: Bank of America’s virtual assistant “Erica”, May 2018
                                                                  • Capital One Financial superpower campaign
                                                                    • Figure 13: Discover your financial superpower, Capital One, June 2018
                                                                • The Consumer – What You Need to Know

                                                                  • Only 6% of Canadians are unbanked
                                                                    • Rising cost of education makes student loans a financial challenge
                                                                      • Canadians are interested in online courses
                                                                        • Most Canadians pay their bills on time
                                                                          • Men more likely to have a financial plan
                                                                            • Few young women have an adequate emergency financial cushion
                                                                            • Product Ownership

                                                                              • Only 6% of Canadians are unbanked
                                                                                • Figure 14: Ownership of financial products, May 2018
                                                                              • Potential solutions for servicing the unbanked
                                                                                • Women have a lower investment ownership
                                                                                  • Figure 15: Ownership of financial products (select), by gender, May 2018
                                                                                • Payday loans can spiral into a debt trap
                                                                                  • Lifestage is a key determinant of product ownership
                                                                                    • Figure 16: Ownership of financial products (select), by age, May 2018
                                                                                • Financial Challenges

                                                                                  • Rising cost of education makes student loans the top financial challenge
                                                                                    • Figure 17: Financial challenges, May 2018
                                                                                  • Saving for children’s education is among the top three parental challenges
                                                                                    • Figure 18: Financial challenges (select), parents vs non-parents, May 2018
                                                                                  • Saving for retirement is the top challenge for 35-54s
                                                                                    • Figure 19: Financial challenges, by age, May 2018
                                                                                  • Paying down credit card debt/day-to-day bills are among the top challenges for 18-34s
                                                                                    • Better financial literacy can help young Canadians
                                                                                    • Financial Education

                                                                                      • A quarter of Canadians are interested in online courses
                                                                                        • Figure 20: Interest in methods of financial education, May 2018
                                                                                      • Few gender differences exist
                                                                                        • Figure 21: Interest in methods of financial education (select), by gender, May 2018
                                                                                      • Younger Canadians are more interested in financial education
                                                                                          • Figure 22: Interest in methods of financial education (select), by age, May 2018
                                                                                        • One-on-one meeting with a financial professional key for 18-34s
                                                                                          • Other methods of financial education
                                                                                            • Asian Canadians more interested in financial education opportunities
                                                                                              • Figure 23: Interest in methods of financial education (select), Asian Canadians vs overall, May 2018
                                                                                            • A fifth of parents are interested in financial apps for their children
                                                                                              • TURF Analysis
                                                                                                • Half of Canadians can be educated through meetings, online courses and apps
                                                                                                  • Figure 24: TURF Analysis – Interest in financial education, May 2018
                                                                                                  • Figure 25: Table – TURF Analysis – Interest in financial education, May 2018
                                                                                              • Budgeting and Savings

                                                                                                • Most Canadians pay their bills on time
                                                                                                    • Figure 26: Attitudes related to budgeting (% agree), May 2018
                                                                                                  • Older Canadians are careful financial managers
                                                                                                    • Figure 27: Attitudes related to budgeting (% agree), by age, May 2018
                                                                                                  • Over a third of higher-income households have an emergency financial cushion
                                                                                                    • Few young women have an adequate emergency financial cushion
                                                                                                      • Figure 28: Agreement with “I have an emergency savings account that equals at least 3 months of my household income”, men vs women 18-34, May 2018
                                                                                                    • Parents with young children are financially stressed
                                                                                                      • Figure 29: Attitudes related to budgeting (% agree), parents vs non-parents, May 2018
                                                                                                    • Around three in 10 have a financial advisor
                                                                                                      • Figure 30: Attitudes related to saving (% agree), May 2018
                                                                                                    • Three in 10 are “automatic” savers
                                                                                                      • Around two in five 45-64s contribute regularly to their retirement savings
                                                                                                        • Figure 31: Attitudes (select) related to saving (% agree), by age, May 2018
                                                                                                    • Financial Planning

                                                                                                      • Men more likely to have a financial plan
                                                                                                        • Figure 32: Attitudes related to financial planning, by gender, May 2018
                                                                                                      • Reinforcing the importance of financial planning/advice
                                                                                                        • Around two in five 18-44s would like to learn how to manage their finances better
                                                                                                          • Figure 33: Attitudes related to financial planning, by age, May 2018
                                                                                                      • Knowledge of Financial Topics

                                                                                                        • Majority of consumers are knowledgeable about credit cards
                                                                                                          • Figure 34: Knowledge of financial topics (% agree), May 2018
                                                                                                        • Older consumers are more knowledgeable about financial products
                                                                                                          • Figure 35: Knowledge of financial topics (% agree), by age, May 2018
                                                                                                        • Only around one in five Canadians follow the stock market
                                                                                                            • Figure 36: Knowledge of financial topics (% agree), May 2018
                                                                                                        • Appendix – Data Sources and Abbreviations

                                                                                                          • Data sources
                                                                                                            • Consumer survey data
                                                                                                              • Abbreviations and terms

                                                                                                              Financial Literacy - Canada - July 2018

                                                                                                              US $4,395.00 (Excl.Tax)