Investor expectations, plans and behaviours differ markedly from one end of Canada to the other, according to the TD Waterhouse Investor Poll.
Overall, the research indicates that those living in the west are more aggressive investors with higher expectations and greater use of financial plans and advice than those living in Quebec and Atlantic Canada. Ontarian investors, in accordance with their geography, are somewhat in the middle.
One of the most dramatic examples of this is the propensity to have a professionally-developed financial plan. This increases in a direct line as one moves from east to west across the country. Those in Atlantic Canada are the least likely, at 24%, to have a financial plan and those in B.C., at 47%, are the most likely.
Investors who live in the Prairie provinces feel that their portfolios will have the best performance in 2007 — a 10.6% return on investment versus the national average of 8.8%. They are also more likely to expect to contribute to an RRSP this year than those residing elsewhere (84% of RRSP holders in the Prairies vs. an average of 75% for RRSP holders outside the Prairies).
Prairie residents plan to contribute the most, averaging $6,720. Those in Quebec anticipate making the smallest contribution, of just under $4,000. Quebec investors also anticipate the most modest returns next year, with a 7%, average.
As an investment choice, mutual funds are much less popular in Quebec than elsewhere. Only 39% of poll respondents there report owning mutual funds compared with an average of 62% outside of Quebec. The most favoured type of investment in Quebec is savings held in a savings account (55%) and the least favoured investment is income trusts. British Columbians are more likely to hold stocks than others (46% versus an average of 36% in the rest of the country).
Income trusts, while not all that popular anywhere, are most likely to be part of the investment portfolio of Western investors.
“Our poll indicates strong regional patterns that seem to influence investor attitudes and choices,” commented Patricia Lovett-Reid, senior vp, TD Waterhouse Canada Inc. “But even in BC, where the poll numbers are highest on this parameter, more than half of respondents indicate they don’t have a professionally prepared plan. And less than a third of investors across Canada plan to contribute the maximum to their RRSP this year.”
“Two certainties that defy geography are the relationship between risk and reward, and the need to contribute regularly and generously to your RRSP,” continued Lovett-Reid. “Westerners accept greater risk in their portfolios and therefore have higher expected rates of return. They, along with Ontarians, are also planning to contribute 47%(1) more on average to their RRSP in the 2006 tax year than investors in Quebec and Atlantic Canada. Such differences tend to exacerbate regional disparities in wealth and retirement security.”
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 investment products either inside or outside of a retirement savings plan. The interviews were conducted between Oct, 20 and Nov. 6, 2006. Respondents were between the ages of 18 and 69. The total sample data is accurate to +/-3.1 percentage points, 19 times out of 20.