Young adults aged 18-24 are less likely than older investors to use all types of investment services, less likely to have a professionally developed financial plan and more likely to be managing their investments entirely on their own, according to the TD Waterhouse Investor Poll.

When asked if they used the services of a bank, credit union or trust company for their investments, six in 10 young adults answered affirmatively, only slightly less than the national average. However, when asked if they used more specialized services including those of a financial planner, full-service broker, discount broker or investment manager, in all cases the propensity to use such services is dramatically lower among 18 to 24 year olds.

“This is a classic ‘Catch 22’ scenario,” says says Patricia Lovett-Reid, senior vp, TD Waterhouse Canada Inc. “Younger, inexperienced investors are in need of the most guidance and encouragement in setting and achieving financial goals. Yet it appears they’re least likely to be getting such advice.”

Younger investors also have the lowest expectations for the average rate of return on their investments in 2007 – 5.2% vs. an average of 8.8% for all ages. Indeed, the expectation on rate of return increases with age, with a slightly more conservative view among the oldest category of respondents (age 65-69).

When asked how they arrived at their target ROI for 2007, just one in four 18-24 year-olds indicate it is based on professional advice versus an average of 40% for all age groups

“Lower ROI expectations of younger investors are directly related to their lack of investment advice,” continues Lovett-Reid. “As knowledge, experience and confidence grows, investors are better equipped to take appropriate risks for higher returns. What’s frustrating about these results is that young adults should be taking a more aggressive approach to risk when it comes to retirement investing. They have the longest investment horizon and will benefit most from the tendency of equity markets to rise over the long term. They will also need a bigger retirement nest-egg given such trends as pressure on the Canada Pension Plan.”

“While most young adults have a relationship with a financial institution, they’re not leveraging that relationship to its maximum advantage,” says Lovett-Reid. “No one expects young people with modest incomes and assets to be working with a full-service broker or to have their own investment advisor, but many financial institutions are eager to build life-long relationships with clients and welcome the opportunity to provide guidance and a basic plan for those just starting out.”

“We have to reach more young people with the message that they can come in and talk to us, at no charge, no matter what the size of their investment. As their portfolio grows over time in size and complexity, we can work with them to offer the right level of advice and mix of wealth management solutions for each stage of their life,” concludes Lovett-Reid.

TD Waterhouse’s sixth consecutive annual poll was conducted by Toronto-based research firm TNS Canadian Facts, They conducted telephone interviews with 1000 randomly selected Canadians across Canada who hold investments products either inside or outside of a registered savings plan. The interviews were conducted between Oct. 18 and Nov. 2, 2006.