Dear Money Lady Readers,
Do you know the difference between the Big Five banks and a Canadian credit union?
We’re all stressing about inflation and interest rates these days, and the demand for “good” financial advice is on the rise. Home ownership, mortgage renewals, investment assistance and basic budgeting can’t be found on social media sites.
That being said, most people automatically gravitate to one of Canada’s largest banks (BMO, RBC, TD, BNS, and CIBC), especially millennials, and why not? The Big Five now dominate this country’s financial sector with approximately $1.05 trillion in Canadian assets.
However, credit today is expensive, and many millennials feel home ownership may not be a reality in their lifetime or they feel they just don’t get the right advice to save and invest for their future. We have all been systematically trained by the banks to seek financial advice online and do our banking through a “do-it-yourself” app.
It was widely believed that millennials would never value a relationship with a banker, so the Big Five ramped up the online banking movement during the COVID-19 pandemic to reduce costs, lower overhead, and increase profits for their shareholders.
But this is not what I hear from my readers who send me hundreds of emails every week, worried about their future. Today more than ever, Canadians want good customer service, honest financial advice, and they do indeed want a partnership with their bank to help them create a future for their families.
The online banking movement has alienated many Canadians and made them very cautious. Are they being sold a product for their benefit or the banks? Is it worth having a relationship with a banker only to find out later that they are no longer there, and they have to start over with someone new?
Why not consider a credit union instead? Canadian credit unions are financial institutions, just like banks. Both organizations have brick and mortar locations where you can go and do your banking. Both offer chequing and savings accounts, mortgages, loans, lines of credit, investments, and retirement products.
The major difference is credit unions are non-profit organizations with a mandate to serve their members and their community, with their primary goal to provide better products and services to members. Commercial banks, on the other hand, are large for-profit entities that work for their shareholders.
“Our advisers stay in their roles longer to build solid relationships with our members," said Ken Shea, CEO of East Coast Credit Union. "We work with clients to create a future plan for home ownership, even if they can’t get into the market right now, and we promise to still be there in the future to help them through the entire buying process."
Right now, we could all use a little help in this economic environment. Finding a professional could save you thousands of dollars, give you peace of mind, and provide you with a customized solution to build the future you have always wanted.
Good luck and best wishes,
Money Lady
Christine Ibbotson is an author, finance writer, national radio host and is now on both “CTV Morning Live” and “CTV News at 6.” Send your money questions (answered free) through her website at www.askthemoneylady.ca. Follow her on Facebook and Instagram.
