Co-operators research shows majority of Canadians do not prioritize their long-term financial planning
With the yearly deadline for RRSP contributions on its way, Co-operators has unveiled the results of new national research, which shows that social pressures and a new DIY investment culture appear to be disrupting Canadians' long-term financial plans.
Conducted on the Angus Reid Forum Panel, the survey of banking and wealth management professionals found 85% of respondents agree that today's "culture of now" overlooks the importance of retirement savings.
The survey also revealed that 57% of financial advisers mistakenly believe that Canadians see RRSPs as an investment tool of the past that is no longer attractive. Another 83% of respondents say they see many pretending to know more about the basics of investment than they really do.
"Right now, consumers are fatigued from the uncertainty of the past couple of years; many are searching for immediate solutions, researching online and falling into a pack-mentality fuelled by a 'fear of missing out' investing anxiety," said Jennifer Cook, financial advisor at Co-operators. "Most Canadians aren't seeing the full potential of RRSPs and TFSAs right now, especially when so many others around them seem to be pursuing quick wins."
A slight 52% majority of advisors across the country said the most frequently asked topic by clients is cryptocurrency. In addition, 55% are increasingly being asked to comment on information gathered from unspecified sources on the Internet. Around three quarters (76%) believe that homes are becoming more and more financially out of reach for many Canadians living in urban areas, pushing many to look for DIY investment strategies as a substitute for long-term security.
"I believe a key part of what's holding many Canadians back from embracing RRSPs and TFSAs as important saving and investing tools is the self-judgment they put on themselves when financial circumstances don't pan out the way they originally hoped,” said Mint Worthy founder and holistic money coach, Vanessa Bowen.
Read more: RRSP vs TFSA: pros and cons in achieving financial goals
Four fifths (80%) of those surveyed say that when people experience financial accidents or losses, many are overwhelmed by doubt, leading to indecision and negligence. In fact, 73% believe that many Canadians are stigmatized by the shame associated with such losses. Two thirds (65%) believe there is social pressure among Canadians to look "financially savvy," and 57% say most people are too embarrassed to ask about how RRSPs and TFSAs work.
"Herein lies the biggest problem - if we don't ask questions, we will never learn and right now, I see many Canadians trying to shoulder the emotional pressure they're feeling, all on their own,” Bowen said. "This is where it is important to seek out an expert advisor, release self-judgments, and ask all kinds of questions, so as to create a plan that is designed to specifically meet long and short-term goals."
