Almost half of Canadians say they do not have a strategy when they apply for a new bank product, according to a national survey for Manulife Bank of Canada.
When asked what best represented their approach to banking, 48% said they simply open an account or apply for a banking service as they need it.
Not surprisingly, the survey also found the typical Canadian has at least eight different banking products, spread among one or more financial institutions.
“Having so many different banking products can be more expensive than most people realize,” says J. Roman Fedchyshyn, president and CEO of Manulife Bank. “Each one of these products most likely costs consumers money and fees, so it could be very cost effective for consumers to follow a banking strategy to reduce or consolidate accounts.”
Previous research in 2005 for Manulife Bank by Moshe Milevsky, Associate Professor of Finance at the Schulich School of Business, York University, found the ad-hoc approach to handling finances is costing Canadians money.
In his analysis of debt habits, Milevsky concluded Canadian families lose an average of $1,000 a year by not effectively managing their debts and short-term assets.
The latest survey, conducted in late March and early April, also found little has changed from a similar poll in 2002 when it comes to banking habits.
The recent omnibus survey found that of 87% of respondents who have a chequing account, 96% also have a high interest savings account. While the average number of bank credit cards per respondent was just over one, 93% of those also held department store or gas company cards. Of the 30% who said they have a mortgage, 45% also have a line of credit.
“This is exactly why Manulife introduced an ‘all-in-one’ account, to provide Canadians with a potentially less expensive alternative to their traditional banking,” added Fedchyshyn.
Already popular in Britain and Australia, benefits of consolidated flexible accounts are still being discovered by many Canadians. When asked if they had heard of an “all-in-one” account, almost two-thirds of those surveyed said they had not.
However, when told that such an account could potentially save them money and reduce their debts sooner, almost four in 10 said they would be willing to change the way they bank and consider an all-in-one account.
The Maritz Research telephone omnibus poll between March 29 and April 3, 2007 included interviews with 1,003 Canadians. The margin of error for a sample of that size is +/- three%, 19 times out of 20.