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BMO Financial Group

December 01, 2011 06:00 ET

Introducing the BMO Financial Literacy Report Card

Canadians give themselves a passing grade when it comes to personal finance knowledge

- While many are familiar with RRSPs and TFSAs, they lack awareness of other key financial terms and products

- Back to school: Majority feel they'd benefit from a Personal Finance 101 course

TORONTO, ONTARIO--(Marketwire - Dec. 1, 2011) - BMO Financial Group today released the results of its inaugural BMO Financial Literacy Report Card which gauges the personal finance knowledge of Canadians.

As part of the research, conducted by Leger Marketing, BMO has established a baseline for a new index designed to measure Canadians' understanding of common financial terms, products and programs. This aligns with BMO's recent submission to the federal government's Task Force on Financial Literacy, which included a recommendation for a national financial literacy index.

As part of the report card, Canadians were asked to give themselves a grade on their level of personal finance knowledge:

  • The majority said they deserved B's (37 per cent) or C's (31 per cent)
  • Only one-in-ten (9 per cent) gave themselves top marks (an A)

As measured by BMO, Canadians are most knowledgeable about:

  • Registered Retirement Savings Plans (RRSPs) - 69 per cent
  • Tax Free Savings Accounts (TFSAs) - 64 per cent
  • The Canada Pension Plan (CPP) - 61 per cent

Canadians are least knowledgeable about:

  • Registered Disability Savings Plans (RDSPs) - 15 per cent
  • Exchange Traded Fund (ETFs) - 14 per cent
  • Dividend Reinvestment Plan (DRIPs) - 14 per cent

The study also found that almost two-thirds of Canadians (61 per cent) feel they would benefit from a Personal Finance 101 course.

"BMO commends Federal Finance Minister Jim Flaherty for launching Financial Literacy Month in Canada and for introducing the Financial Literacy Leader Act. As part of our commitment to Making Money Make Sense, BMO has introduced a series of tips during the month of November," said Tina Di Vito, Head of the BMO Retirement Institute and author of 52 Ways to Wreck Your Retirement…and How to Rescue It. "Financial matters can be complicated and sometimes intimidating. However, Canadians can improve their overall financial knowledge by first getting a better understanding of their own financial 'big picture'. In many cases, Canadians are well-informed financially, but a common stumbling block is understanding how everything fits together."

"It's clear from the numbers that Canadians see room for improvement when it comes to their overall understanding of personal finance. Given the challenges faced by households in Canada, enhancing this skill set should be a priority for everyone involved - including the financial services sector," said Su McVey, Vice President, BMO Bank of Montreal.

Ms. McVey noted that BMO has introduced accessible tools and resources to help Canadians gain clarity and make sense of their financial decisions, including BMO SmartSteps, BMO SmartSteps for Business, BMO SmartSteps for Students, BMO SmartSteps for Investing, BMO SmartSteps for Parents, BMO SmartSteps for Homeowners and BMO MoneyLogic.

For more on financial literacy, BMO encourages Canadians to visit http://www.financialliteracymonth.ca/ or http://www.bmo.com/home/about/banking/corporate-responsibility/customers/financial-literacy.

The survey was completed on-line from November 21st, 2011 to November 24th, 2011 using Leger Marketing's online panel, LegerWeb, with a sample of 1520 Canadians. A probability sample of the same size would yield a margin of error of 2.5 per cent, 19 times out of 20.

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