Study reveals insights into client-advisor relationships and financial goals
What are the biggest concerns and challenges for Canadian investors and would-be investors amid the cost of living and higher-rate environment?
In its first Investor Survey, the Canadian Investment Regulatory Organization has asked around 3500 adults about their investment habits, strategies, and concerns, along with wider exploration of their financial goals and challenges.
More than half of respondents said that they are investors with more than half of them working with an advisor including 39% who only do so and 13% who combine advice with DIY investing. Almost one quarter were completely DIY. Many DIY investors had opened their accounts in the last three years – 4 in 10 overall and 6 in 10 among under 35s – and cited direct control of their investments and ease of opening the account among their reasons.
Older participants were more likely to be investors – 61% of over 65s are compared to 50% of under 35s – as were those with higher earnings (79% of those with a household income above $150K compared to 36% with incomes under $50K), men, those with a college degree, and those in larger cities.
Mutual funds (32%), term deposits and GICs (23%), and stocks (18%) were the most commonly held investments reported by those who took CIRO’s survey, with ETFs and cryptos each held by 12%.
Retirement, paying down debt, and building an emergency fund were the top financial goals although priorities varied depending on different stages of life.
Asked about investment decisions, just 9% say they are willing to take on significant risk, rising to 17% among those who mix working with an advisor with DIY investing and 14% among DIY only investors.
A quarter of those who said they would take on significant risk said they would sell during a significant market decline, which CIRO says reinforces the importance of considering loss aversion in assessing risk tolerance.
Getting advice can also include risky behaviour with 28% of Canadians indicating they use social media, forums, or finfluencers for financial information and advice and 44% of these believing that the information they receive from these sources is equally valuable as that from a traditional advisor, while 12% find it more valuable, and only 17% consider it less valuable.
Cost of living
The cost of living remains a key issue impacting Canadians’ confidence in money management and investing.
Just 21% of survey respondents said they feel very confident about meeting their financial objectives, with inflation and the rising cost of living cited by 66%. This is also the primary reason cited by investors who reported investing less in the past year. Approximately 71% of investors working with a financial advisor have discussed the impact of inflation on their investments.
