The financial literacy of Canadians is once again under the spotlight as a LowestRates.ca survey has found most are underprepared when shopping for financial products, such as insurance. The study finds that not enough research is being done and consumers have major gaps in their knowledge.
While this is worrying, it presents an opportunity for brokers, who can step in an offer important advice to customers. Conducted by Ipsos, the survey shows that most Canadians have still not embraced websites as a method for comparing insurance, credit cards, and mortgages. However, they will go online to compare travel costs.
Without the proper research and willingness to compare, consumers are overpaying for many of their financial products.
In Alberta, 45% of respondents say they do thorough research when purchasing a financial product. In Ontario, the number was 41%, followed by Atlantic Canada (39%), Saskatchewan and Manitoba (both 38%), Quebec (35%), and BC (31%).
“The massive gulf between Canadians who compare travel options and financial products is disappointing. Because the latter is where you save real money,” said LowestRates.ca CEO Justin Thouin. “Sure, you can shave hundreds of dollars off your flight by using comparison sites, but taking the time to compare auto insurance or mortgages saves many of our users thousands of dollars a year — and those savings add up over decades.”
Millennials are the most likely to research online when buying auto insurance (52%), reflecting a generational impact of growing up with the internet.
“A few months ago, we found that many Canadians don’t understand how common financial products work,” added Thouin. “And this survey really hammers home that a large part of that is because Canadians can’t be bothered. We need to make comparing financial products as common as comparing flights or hotels.”