“Sandwich generation” Canadians are feeling the pinch in their retirement savings, according to a survey released by Toronto-based BMO Nesbitt Burns Inc. on Tuesday. But that doesn’t mean advisors should overlook this cash-strapped group as potential clients.
“Advisors tend to look for wealthier clients who have an immediate need,” says Sylvain Brisebois, an Ottawa-based regional manager with BMO Nesbitt Burns, “but I think if we ignore this generation as advisors, we’re ignoring the possibility of having terrific clients and terrific relationships a few years out.”
According to the survey, 55% of Canadians aged 45-64 are caring for their children, aging relatives or both and are what are known as the “sandwich generation.” This demographic is on average over $500,000 short of their ideal retirement savings of $818,000.
However, while money may be tight now, Brisebois says in a five to ten years cash flow will start to improve for these Canadians as current financial commitments, such as tuition fees and mortgage payments come to an end. As such, Brisebois says, these Canadians are likely to enter a “catch-up” mode where their investment savings will start to expand dramatically.
In the meantime, 76% of those people surveyed say the everyday stress of work, paying of household bills and taking care of families makes it difficult to reach their financial goals. As such, Brisebois says financial planning conversations – which in some cases may be difficult as clients are forced to make a decisions between two goals – are going to become even more important to this demographic.