When it comes to financial advice, including information on the best mortgage rates, who do you turn to? According to a survey released by the Bank of Montreal last Friday, Canadian’s are more likely to turn to their financial institution with money problems than anywhere else. This includes friends, family members, financial advisors and mortgage brokers. Even in the age of social media, younger home hunters and investors admit that the bank is their number one source for financial advice.
But is the bank really the best place to go for unbiased information?
There’s no denying that Canada’s big six banks deserve a pat on the back for their marketing prowess. But it’s important to recognize it for what it is – smoke and mirrors. Banks position themselves as partners in the pursuit for financial success, but at the end of the day that’s not necessarily the truth. While banks aren’t out to suck you dry, they certainly are out to make a profit. At the end of the day, banks are driven to rake in profits in order to please shareholders. Sadly, this is often at the expense of the customer.
About the BMO Survey
BMO’s survey, which was conducted in October by Pollara, assessed the financial decision-making process of 1,000 Canadians aged 18 and over. Fifty-six percent of participants in the survey said they were most likely to defer to their bank for help with financial questions. Only 47 percent stated they would consult with a financial advisor while just 39 percent said they would turn to friends and family members. Social media, websites, print media, and blogs accounted for the rest.
According to the survey, elderly home hunters were far more weary of their bank’s advice. People aged 65 and older were least likely to consult the bank with just 44 percent ranking banks as a useful source of information. In comparison, 63 percent of people aged 18 to 29 indicated that they would turn to their bank when in need of assistance.
Never Assume the Bank Will Give You a Great Rate
While the banks know a great deal about our financial situation, they have a lifetime’s worth of information concerning our income after all, it’s important to note that they’re often more concerned with customer retention than customer satisfaction. It’s worth noting that there is no onus on the bank to provide you with products or advice that suits your personal needs. Of course, that’s what they should be doing. Remember that some of the people you’re dealing with will be paid in part through commissions or bonuses based on the products that they sell. What’s more, they’re probably under instruction to push a certain product over another, regardless of whether that’s the best option for you or not.
With Age Comes Wisdom
Data from the BMO study shows that Canadian’s over the age of 65 may be on to something. Having learned the hard way, these folks are far more likely to take their banker’s advice with a grain of salt. As such, this demographic is far more likely to consult a mortgage broker in regards to interest rates and a financial advisor concerning potential investments.
Whoever you speak to, remember to get a second, third and sometimes even a fourth opinion. Use the resources you have available to you, including the newspaper, blogs, and your social network. As banks move further into the realm of investments, mortgages, and financial planning now is not time to let your financial literacy lag. Perform your due diligence and remember to assess and reassess all of the financial products that are recommended to you. When it comes to securing a competitive mortgage rate, also consult with a professional mortgage broker in order to ensure that you’re receiving honest, unbiased advice.