Table of Contents
Executive Summary
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- Impact of COVID-19 on investing
- Some 4% of Canadians have at least a million in investments
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- Figure 1: Breakdown of Investments (excluding cryptocurrencies), January 2020
- Around half of affluent investors own fixed income investments and stocks
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- Figure 2: Ownership of products/accounts, by level of investments, January 2020
- Affluent women are less comfortable, what can the industry do?
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- Figure 3: General attitudes about investing, affluent man vs affluent women, January 2020
- Younger are more socially conscious
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- Figure 4: General attitudes and behaviours about investing (select), 18-44s vs Over-45s, January 2020
- Affluent women more likely to use robo-advisors
- What it means
The Impact of COVID-19 on Affluent Investing
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- Summary
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- Figure 5: Short, medium and longer term impact of COVID-19 on affluent investing, April 2020
- Opportunities and Threats
- A temporary flight to safer investments is inevitable...
- …and the crisis will increase the popularity of ESG investing
- An emphasis on community and mutual support
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- Figure 6: Vancity Facebook post, March 2020
- Playing to their confidence as investors
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- Figure 7: Desjardins Online Brokerage mobile ad, May 2020
- Figure 8: Fisher Investments Canada online ad, May 2020
- Market impact of COVID-19
- Fewer in-person interactions as consumers move online
- Mutual funds face flood of redemptions, some real estate funds halt redemptions
- Shifts in consumer behaviour
- Affluent investors more likely to keep their investments in Canada
- How the crisis will affect key consumer segments
- Women are more likely to cut spending drastically
- Opportunity for robo-advisors to target affluent women
- Younger affluent Canadians may be experiencing a cash surplus
- How a COVID-19 recession will impact consumer finances
- Unemployment is a concern as GDP drops
- Economic update
- Moving from 2019, perception of financial health was already softening
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- Figure 9: Perception of financial health, January/February 2015-20
- COVID-19: Canadian context
The Market – What You Need to Know
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- Financial market impact of COVID-19
- Affluent market segment perspective: doctors
- New deferred annuities to provide greater income security for retirees
- Deferred sales charges to be banned
- Trailer fees also on the “ban radar”
What’s New?
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- Financial market impact of COVID-19
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- Figure 10: Worry about impact of COVID-19 on one’s lifestyle, March 26 – April 1, 2020
- Affluent market segment perspective: doctors
- Background
- Doctors vs other affluent clients
- Competition
- New deferred annuities to provide greater income security for retirees
- Deferred sales charges to be banned
- Trailer fees also on the “ban radar”
Key Players – What You Need to Know
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- Partnerships and acquisitions
- Legal and regulatory news
- Marketing campaigns
Industry Developments and Innovations
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- Subsidiary of Purpose Financial buying Wealthsimple’s financial-advisor business
- Hub Financial partners with Nest Wealth
- Discount brokerages hit with class-action lawsuit
- Handing back control of PACE credit union to members
- Taking over stock market trading supervision in Canada
- Mutual funds face flood of redemptions, some real estate funds halt redemptions
Marketing Campaigns
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- Manulife puts disciplined advice at the forefront
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- Figure 11: Manulife Investment Management - The Farm, February 2020
- BMO breaks biases
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- Figure 12: BMO | Jane’s Story, March 2020
- Ellevest (US)
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- Figure 13: Retirement in Real Life: Irene Buchman & Kayla Gluck, January 2019
The Consumer – What You Need to Know
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- Some 4% of Canadians have more than a million in investments
- Around half of affluent investors own fixed income investments and stocks
- Retail banks most favoured for investing
- Majority of investors are risk averse, less so among affluent
- Affluent women more likely to outsource investment decision making
- Affluent women are less comfortable interacting with the investment industry
Affluence & Product Ownership
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- Some 4% of Canadians have at least a million in investments
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- Figure 14: Breakdown of Investments (excluding cryptocurrencies), January 2020
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- Figure 15: “Who are the affluent?” by age and gender, January 2020
- Some 11% have a net worth of more than a million
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- Figure 16: Breakdown of net worth (including real estate and pensions), January 2020
- Half of Canadians have a TFSA, majority have a savings account
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- Figure 17: Ownership of products/accounts, January 2020
- Around half of affluent investors own fixed income investments and stocks
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- Figure 18: Ownership of products/accounts, by level of investments, January 2020
- Affluent men have a higher ownership of stocks and ETFs
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- Figure 19: Ownership of products/accounts (select), affluent men vs affluent women, January 2020
Type of Financial Institution Used
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- Retail banks most favoured for investing
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- Figure 20: Type of FI used for investing, January 2020
- Those with $500k-$1 million in investments are key clients for independent investment companies
- …while millionaires are key clients for bank/credit union owned wealth management subsidiaries
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- Figure 21: Type of FI used for investing, by amount of investments, January 2020
- Discount brokerage use trends higher among affluent, Chinese Canadians and men
Investing Activities
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- Around half have performed one of the selected investing activities
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- Figure 22: Investing activities performed, January 2020
- Passive investing and using investment software holds more appeal to affluent men
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- Figure 23: Investing activities performed (select), by amount of investments, January 2020
- Estate planning and charitable giving are more important for affluent
- Affluent women more likely to use robo-advisors and create a financial plan
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- Figure 24: Investing activities performed, (Select), affluent men vs affluent women, January 2020
Attitudes towards Investing
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- Majority find investing complicated and interesting
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- Figure 25: Attitudes towards investing, January 2020
- Majority of investors are risk averse, relatively less among affluent
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- Figure 26: Attitudes towards investing (% agree), affluent vs overall, January 2020
- Majority feel that investing in property is safer than the stock market
- Affluent women are more risk averse
Financial Advice
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- Awareness about financial advice is fairly high
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- Figure 27: Attitudes related to financial advice, January 2020
- Younger consumers are strongly open to digital communication with their financial advisor
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- Figure 28: Attitudes related to financial advice (select), 18-44s vs over-45s, January 2020
- Affluent women more likely to outsource investment decision making to a financial advisor
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- Figure 29: Attitudes related to financial advice (select), affluent vs overall, January 2020
Investing Strategies & General Attitudes
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- Only one in four comfortable interacting with the investment industry
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- Figure 30: General attitudes and behaviours about investing, January 2020
- Younger are more socially conscious
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- Figure 31: General attitudes and behaviours about investing (select), 18-44s vs over-45s, January 2020
- Affluent women are less comfortable, what can the industry do?
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- Figure 32: General attitudes about investing (select), affluent men vs affluent women, January 2020
- Affluent investors more likely to keep their investments in Canada
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- Figure 33: General attitudes and behaviours about investing (select), affluent vs overall, January 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Abbreviations and terms
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