TORONTO, Dec. 18, 2002 – Most Canadians with RRSPs hope to match or increase their contributions for the 2002 tax year, according to a recent survey for Manulife Investments, the wealth management arm of one of Canada’s leading financial services companies.
More than four out of five RRSP holders (86 per cent) who responded in late November to a national survey by Market Facts of Canada said they plan to invest the same amount or more in their RRSP this year. Fifty-eight per cent will maintain their RRSP contributions, while 28 per cent said they will invest more than during the 2001 tax year. Eight per cent plan to invest less.
“This certainly suggests that most Canadians are staying focused on their long-term investment goals and are not verreacting to world or market events,” said Bruce Gordon, Manulife Financial Executive Vice President and General Manager of Canadian Operations. “A key for investors is to make sure that they’re well-diversified and seeking expert advice.”
Despite strong swings in equity markets this year, 59 per cent of investors surveyed said they have changed none of their holdings. Another 30 per cent changed a few investments, while less than eight per cent shifted most or all of their holdings. When it comes to their overall investment style, 69 per cent of Canadians who hold investments said they have not changed the way they invest.
Diversification, advice important
The survey also suggests many Canadians are seeking financial advice. More than half of those with advisors sought their expertise this year, while 43 per cent of investors think it’s become more important to seek professional advice to manage their money.
“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 Investment Funds, Manulife Financial.
“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.”
Of those surveyed, 41 per cent said they are working with a financial advisor or financial planner. Affluent Canadians are more likely to have a financial advisor, with 64 per cent of those with household incomes of $70,000 or more reporting that they work with a financial advisor.
When asked if they are worried about meeting their retirement goals, 12 per cent said they are concerned, while the majority (52 per cent) expressed confidence about meeting their retirement goals.
A previous survey of 501 affluent Canadians (with more than $100,000 in investible household assets), conducted by Ipsos-Reid for Manulife Investments, found 40 per cent believe borrowing to invest in an RRSP is a good idea.
Regular contributions vs. the lump sum
In the latest poll by Market Facts, regular contributions emerge as the most popular way to contribute to an RRSP. Forty-one per cent said they regularly contribute through weekly, bi-weekly or monthly payments.
Another 30 per cent plan to make a lump sum contribution before the end of February to qualify for a 2002 tax year deduction, while the remainder make irregular contributions (11 per cent) and another 18 per cent will not contribute at all this year.
Younger Canadians tend to make RRSP contributions regularly, with 67 per cent of those aged 25-34 saying they make contributions through regular payments.
A similar-sized group of investors said diversification (59 per cent) is important, while 60 per cent said now, more than ever, they need assurances that they are selecting quality investments.
Of investors surveyed, 68 per cent said, regardless of what they invest in, they would like a guarantee that their initial investment won’t drop below a certain level, no matter what happens in the markets. That’s up from 60 per cent a year ago.
Poll results released today are based on a Market Facts of Canada survey of 1,006 Canadians (18 years and older) between November 27 and December 1, 2002. The overall results have a margin of error of plus or minus 3.2 percentage points, 19 times out of 20.
About Manulife Investments
Manulife Investments is the brand name identifying the personal wealth management lines of business offered by The Manufacturers Life Insurance Company and its subsidiaries in Canada. As one of Canada’s leading integrated financial services providers, Manulife Investments offers a variety of products and services including segregated fund contracts, mutual funds, annuities and guaranteed interest contracts.
About Manulife Financial
Manulife Financial is a leading Canadian-based financial services group 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 were Cdn$139.2 billion as at September 30, 2002.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.
For more information on Manulife RRSP options, please visit www.manulife.ca/investments