Canadians are world’s most active investors

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The most discussed topics with those advisors: seeking better returns, minimizing risk and developing a retirement plan, all identified as topics of discussion among 35% of respondents. Canadians were more likely than the global average (33% versus 28%) to seek advice on how to protect investments from unforeseen economic events, and they were equally likely to discuss with their advisors how to protect investments and savings from inflation.

Canadian are also more optimistic about their financial futures than their global counterparts. More than half of Canadian investors (55%) are feeling positive about their financial prospects, compared with 48% of global investors.

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Yet, despite steady gains in recent years that have pushed some stock markets to all-time highs, less than two-thirds of Canadians say they’re confident they’ll reach their retirement goals.

The #1 priority for 44% of Canadian investors is “funding a comfortable retirement” (compared with 35% globally). But only 64% are confident they can achieve that goal. They were more confident about paying off their mortgages (88%), but less so about paying off other debt (75%).

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“Like the rest of the world, Canadians are still heavily exposed to low- or no-return cash investments, but there are guardedly hopeful signs that investors are ready to take action to better manage their money,” says Noel Archard, managing director, Head of BlackRock Canada.

Debts, bills and clinging to cash

Debt and bill payments appear to be contributing to the concerns of average Canadians. The percentage of take-home pay devoted to living costs, bills and debt is high in Canada (48%) compared to the global average (40%), and only slightly below the U.S. and Australia (49%).

These costs translate into widespread personal savings deficits. Canadians reported saving, on average, just 14% of their take-home pay each month – just below the global average of 18%, and less than in the U.S. (16%), Australia (17%) or Hong Kong (29%).

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Canadian investors also continue to hold a significant percentage of their assets in low- or no-return cash accounts, which accounted for 43% of savings and investments among survey respondents. That’s the lowest rate of cash holdings among countries surveyed, and below the global results (56%), but there is little indication Canadians are ready to move out of cash in the next 12 months. In fact, 84% of those respondents holding cash said they plan to maintain or increase their cash holdings over the next year.

When asked what would encourage them to invest more of their cash savings, 32% indicated “less personal debt,” compared with 21% globally. However, “guaranteed return from investments” and “knowing they won’t lose my initial investment” were the most significant factors, cited by 42% and 36% of respondents, respectively.

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Meanwhile, those surveyed who were already in retirement had plenty of advice for others. When asked whether, with the benefit of hindsight, there is anything they would do differently, retirees offered:

• Start saving as early as possible (78%)
• Think long-term (58%)
• Save as much as you can (66%)
• Pay off your debts (74%)
• Learn about the different investment products (38%)
• Seek professional financial advice (47%)