A recent national survey provides both answers and questions about the ability of Canadians to manage their personal finances.
In February, CIBC released the results of a survey done with 1,510 randomly selected Canadian adults. Three responses provide some insight to the financial issues facing many of us.
Fifty-three per cent think that financial decisions are more complicated than they were 20 years ago. That is very understandable since the world has become more complicated.
Fifty-two per cent say they have insufficient knowledge to make financial decisions and therefore have struggled when required to do so.
Sixty-six per cent said they could benefit from receiving financial advice. That seems logical.
Financial decisions are more difficult and people don’t have sufficient knowledge to make those decisions. Of course many people will want financial advice.
The answer to how Canadians think about making financial decisions does provide some insight. In this regard the CIBC research is of a real value.
However the next response to a question leaves a significant question. That is the giant elephant in the room.
Only 38 per cent of Canadians are planning to meet with a financial advisor this year. That begs the question of why.
If 66 per cent say they could benefit from financial advice why would only 38 per cent follow through and seek out an advisor. On the surface it makes no sense.
It does not take much time and effort to arrange to speak with a financial advisor and most Canadians would benefit from making good financial decisions.
Perhaps it is my personal bias that would assume most would want to seek out financial advice. Or is there a different reason?
Does the consumer feel financial advisors have the necessary skills to provide useful advice?
Are advisors independent thinkers or is there the perception that the ultimate motivation is to sell a financial product?
Is there lack of clarity about how advisors are paid and therefore concern about a potential conflict of interest?
What causes so many people needing financial advice to avoiding that advice?
It would be beneficial to see research of how people respond to financial advice as opposed to other types of advice including medical, accounting and legal.
The CIBC research clearly reveals a strong need for Canadians to seek financial advice. The lingering question is a personal one.
Why do many people avoid seeking financial advice?