As if immigrating to a new country wasn't stressful enough, nearly 50 per cent of all newcomers to Canada say they face obstacles when establishing their new financial identity -- despite a high level of financial savvy.
The top barrier? Establishing credit, finds a new consumer poll conducted by RBC. Complicating matters, nearly one-third (27 per cent) of respondents said their financial institution didn't fully understand the challenges new immigrants face.
The credit catch 22 can be frustrating, admits Paul Sy, director, multicultural markets at RBC in Toronto. It's tough to establish your creditworthiness and access credit cards, credit lines or mortgages without some form of credit history in this country.
"About 78 per cent of newcomers understand the importance of credit history … having a strong credit history provides access to a lot of things Canadians might take for granted such as getting your first apartment, getting a car or a cellphone," he says. "The second piece to that is four in 10 of them (40 per cent) realize the implications of their credit history at the time they were going to make a relatively large purchase."
What can your bank do for you?
Talk to your financial services provider to see what kind of options are available like unsecured credit cards or services in your native language.
"I tend to look at the ability for banks to better service newcomers, not just from a credit perspective, but also from a client experience and services perspective," he adds. "Language is always one of those things that helps newcomers determine what bank to establish a relationship with. Eight in 10 newcomers don't speak English or French at home."
Financial advice is also a critical factor for new Canadians to consider accessing. Sy says about half of newcomers get their financial advice from family and friends.
"It's great to get advice people that you trust. But with these things, particularly if you're planning to make a big purchase such as a house in the next few years for instance, newcomers can really benefit from sitting down and talking to a financial advisor," he remarks. "Right from the get-go, you need to plan how you want to build out your financial life in Canada."
Where to get help?
For those just arriving to our shores, Citizenship and Immigration Canada provides a number of important tips to consider, including detailed steps on how to protect your money.
The Financial Consumer Agency of Canada also provides a variety of financial products and services for new citizens including bank accounts, payday loans, mortgages and credit reports. Moreover, the convenience provided by bankcards is a wonderful thing but be aware it can cost more than $8 to use a bank machine that isn't owned by your own financial institution.
The Canadian Bankers Association also provides assistance for newcomers when it comes to services like opening a bank account, advice on how to establish a small business and where to go for assistance should you run into difficulties with your bank.
Are you depositing funds into an account at a financial institution that's a member of the Canada Deposit Insurance Corp.? Don't overlook the value of ensuring your savings are insured by the CDIC.
As Sy mentioned, do consider meeting with and discussing your financial portfolio with an advisor. If you're not sure where to begin looking for that trustworthy, certified financial advisor, you can do so through Advocis, the Financial Advisors Association of Canada.
One more word to the wise: be aware of the taxman's shadow. The Canada Revenue Agency provides important information for new Canadians on residential ties, what income you must report and entitlement to benefits and credits.