Most investors turn to financial advisors in wake of Sept. 11 attacks, market swings
TORONTO, Jan. 2 – Canadians plan to stay the course with
their long-term investments and make few if any changes in the way they’ll save for
retirement in the RRSP season ahead, according to a recent survey for Manulife Financial,
among Canada’s leading life insurance companies.
More than four out of five investors (82 per cent) who
responded to a national poll by Market Facts of Canada said they changed none of their
investments amid market swings that followed the Sept. 11 terrorist attacks. When asked if
they have changed their overall investment style, almost four out of five (79 per cent)
said they made no change at all.
“This certainly reflects that Canadians are generally
savvy investors and are unlikely to overreact to world events,” said Bruce Gordon,
Manulife’s Executive Vice President of Canadian Operations. “A key for investors is
to make sure that they’re well-diversified and seeking expert advice, particularly when
there are heightened worries about political and economic uncertainty.”
Advisors more important this year
While investors generally are standing by their investments, the survey also suggests more
Canadians are seeking financial advice since the terrorist attacks on New York and Washington.
More than 40 per cent of investors believe it’s more
important this year to get professional advice to help them manage their long-term
investments. Of those who have financial advisors, almost seven out of 10 (68 per cent)
said they have called them for advice in the past three months.
“Advisors play an important role in helping Canadians
make better financial decisions and given the range of reactions to the market, advisors
also need to be sure to meet their clients’ needs and goals,” added Eric Grove, Vice
President Marketing of Manulife Wealth Management.
Most will make RRSP contributions
Of the 77 per cent of those surveyed who invest in RRSPs,
more than four out of five (82 per cent) plan to make a contribution for the 2001 tax
season. Only 16 per cent said they do not plan to make a contribution, while two per cent refused to answer.
Among those with RRSPs, almost half (46 per cent) say they
are now making regular contributions to their RRSPs while 28 per cent plan to make a lump
sum contribution before the end of February to qualify for a 2001 tax year deduction.
“The positive irony of the last several months is that
many so-called GIC refugees who moved into mutual funds for the first time in the 90s –
looking for stronger returns in the face of lower interest rates — are now remaining very
calm and focused on long-term growth within the market,” Mr. Grove said.
Investors’ reactions vary broadly
A wide range of investor attitudes is reflected in other
findings. Some 42 per cent of those polled said they see strong potential growth in the
stock market during the coming year — while almost one in three (33 per cent) said they
are very concerned about their long-term investments and plan no further investments until
they can see which way markets are headed.
“There is an extreme range of opinions and experience
among investors,” Mr. Grove added, “which means the most successful advisors
will become extremely familiar with their clients’ overall goals and approach toward investing.”
Slightly more than half of those surveyed (53 per cent)
said they are working with a financial advisor or financial planner, which suggests there
also are many Canadians making investment decisions on their own, he said.
A similar-sized group said diversification in their
investments (54 per cent) is a good defence against market changes.
Less than three per cent of those surveyed said they have
changed all or many of their investments since Sept. 11 — yet some 60 per cent said,
regardless of where they invest, they would like a guarantee that their initial investment
won’t drop below a certain level, no matter what happens in the markets.
Poll results released today are based on a Market Facts of
Canada survey of 1,003 Canadians (18 years and older) between November 28 and December 2,
2001. The overall results have a margin of error of plus or minus 3.2 percentage points,
19 times out of 20. For results from investors only, the margin of error increases
slightly to plus or minus four percentage points, 19 times out of 20.
About Manulife Financial
Manulife Financial is a leading Canadian-based financial
services company operating in 15 countries and territories worldwide. Through its
extensive network of employees, agents and distribution partners, Manulife Financial
offers clients a diverse range of financial protection products and wealth management
services. Funds under management by Manulife Financial (Manulife Financial Corporation and
its affiliated companies) were Cdn$134.6 billion as at September 30, 2001.
Manulife Financial Corporation trades as ‘MFC’ on the TSE,
NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the
Internet at www.manulife.com.