Research report on a new Applied Financial Literacy Index
The new Applied Financial Literacy Index (the Index) was built on an extensive process of scientific research and the identification of three key variables:
- Extent to which consumers have a prudent or imprudent attitude
- Financial competence, including knowledge of basic concepts in personal finance
- Financial product ownership
The data for the Index was collected in the summer of 2021 by means of a telephone survey of a sample of 1,002 adult respondents. Each respondent was assigned a score of 0 to 100. When the individual scores for the sample are cumulated, the average level of financial literacy is 54.10.
In addition to supporting an observation made about the situation in Québec at the time the data was collected, the report provides access to several data of interest and bears out certain financial product acquisition patterns. It also confirms that financial literacy is acquired not only through books but, predominantly, in the action of consuming financial products and services. Our first financial experiences are therefore unique opportunities, regardless of our age, to advance along our learning curve.
The report concludes with a call to challenge certain traditional approaches to financial education. In addition to focusing on consumer first experiences that have high awareness-building potential, such as taking out a mortgage or buying a new investment product, it is recommended that information that fulfills an immediate, easily identifiable function be considered in the order in which information is presented to consumers.