Canadian investors are more optimistic about their financial future than investors in other markets, according to a new survey from New York-based BlackRock, Inc.
The firm reports that its first-ever global survey found that 55% of Canadian investors are feeling positive about their financial prospects, compared with 48% of global investors.
Nevertheless, less than two-thirds of Canadians say that they are confident they will reach their retirement goals, the global survey found. And, it says that only half of Canadian investors feel that they are in control of their financial future, or that they are making the right investment decisions.
Indeed, Canadian investors are somewhat more worried about retirement than investors generally, with 44% saying that “funding a comfortable retirement” is their top priority, compared with 35% globally.
Canadians are more confident about paying off their mortgages (88%), but less comfortable about paying off other debt (75%), it notes.
“What we’re seeing is an interesting mix of Canadians’ financial conservatism and nervousness coupled with a clear desire to take a more active and informed role in managing their financial future,” said Noel Archard, managing director, head of BlackRock Canada. “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.”
The survey also found that 64% of Canadian investors said they take financial planning seriously, and 55% said that they are interested in learning more about savings and investments. It reports that 60% said they use an advisor (which is a higher proportion than any other country, and double the global average of 24%) — with 31% using a professional advisor, and 29% utilizing a bank advisor.
The survey found that Canadians were more likely to seek advice on how to protect investments from unforeseen economic events (33% for Canadian investors versus 28% globally), and that they were equally likely to discuss with their advisors how to protect investments and savings from inflation.
The survey also highlighted the debt problem Canadian households face, with the percentage of take-home pay devoted to living costs, bills and debt reported to be 48% in Canada, compared to the global average of 40%. And, savings for Canadians were reported at, on average, just 14% of take-home pay, below the global average of 18%.
Canadian investors report that 43% of their assets are in low- or no-return cash accounts, which is the lowest rate of cash holdings among countries surveyed, and below the global average (56%). And, 84% of those holding cash said they plan to maintain or increase their cash holdings over the next year, it says.
Finally, the survey notes that investors are starting to recognize that their retirement savings will need to last longer than expected. “The good news is that Canadian investors at least seem to be recognizing the danger,” said Archard. “The challenge for them now is to do something about it.”