Skip to main content

In the banks we trust.

A question to ponder for Financial Literacy Month is why this is so.

A Bank of Montreal survey to be released Friday shows people are more likely to turn to their bank with a financial question than anywhere else, including financial advisers, friends and family and the media. The younger people are, the more important banks become as a source of information.

Story continues below advertisement

BMO and all the banks in this country deserve kudos for the masterly way in which they market themselves not as what they really are, financial supermarkets, but as our partners in pursuit of financial success. Don't be gullible. Banks are not the predators that their harshest critics say they are, but their primary accountability is to shareholders who are hungry for rising profits.

The BMO survey involved 1,000 people aged 18 and older and was conducted late last month by Pollara. Fifty-six per cent of participants said they're most likely to turn to their bank with a financial question, compared with 47 per cent for a financial adviser and 39 per cent for friends and family. A mix of websites, blogs, print media and social media accounted for the rest.

People aged 65 and older were least likely to consult the bank – 44 per cent of this group ranked the banks as a source of help. At the other end of the scale, 63 per cent of people aged 18 to 29 indicated they relied on banks.

The banks know us well as customers – often they have a lifetime's worth of financial information to consult, and they are concerned about customer retention.

Banks also sell the financial tools we all need, and they're usually open to negotiating the cost or interest rates involved. The more business you have with a bank, the better the deal you should get.

On the other hand, there's no onus on the banks to offer the products or advice that work best for your needs. Some of the people you deal with at bank branches may in part be paid through commissions or bonuses on products sold, or they may be under instructions to emphasize one product over another.

Either way, what's best for the bank may not be ideal for you.

Story continues below advertisement

Banks may also withhold key information that would help you make informed choices. If you don't know the intricacies of a product, you can't count on them to wise you up.

In at least one sense, banks appear to be getting along better with others. It used to be commonplace for federal members of Parliament to lace into the banks over high credit card rates, service fees and such. Now, whether it's because the banks are better behaved or simply that people have other concerns, hardly a word is said against the banks by MPs these days.

You get a different view when you look how the number of bank-related complaints flowing into the Ombudsman for Banking Services and Investments has risen to 448 from 240 in the past five years, or 87 per cent. OBSI hears from people only after they have exhausted every avenue within a bank to resolve a complaint.

The lower level of reliance on banks among people aged 65 and older suggests they've figured banks out. Younger Canadians, save yourself from learning the hard way. Make the banks part of your advice team, but only one voice among many.

Financial advisers are also worth consulting, especially those who charge fees for their services rather than getting paid through commissions embedded in products. Avoid advisers who respond to every point you raise with a product you should buy.

Whoever you speak to, be sure to get second, third and fourth opinions using the resources available from the likes of this newspaper, as well as blogs, financial websites and social media. Brief yourself before you talk to a banker or adviser by doing some online research, and then do some further checking after your conversation.

Story continues below advertisement

It's never been more important to apply the principles of financial literacy to the way we deal with banks. More and more, the banks are moving beyond chequing accounts and mortgages into selling investments and financial planning. Have you noticed how more bank branches are opening on Saturday and Sunday? It's all about helping you find time to come in for advice.

Go on in to talk, but remember that a key rule of financial literacy is to be careful about trusting the banks.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies