TORONTO, Jan. 29 2009 – The Russell Financial Health Index (RFHI) – a quarterly online calculator that allows investors to compare their financial health to other Canadians across the country – recently dropped 3 points from 53.8 to 50.7 as the economic and market downturn impacted how Canadians felt about their financial health.
According to the RFHI results:
- Females are more concerned than males regarding financial matters.
- French Canadians are less concerned about their finances than English Canada
- Younger investors (25 to 34 years old) are more concerned than older ones (55 years old and over) on income related factors. Their ability to lead desired lifestyles in the future and longer term factors related to inheritance and dependent aging parents and children were the key concerns.
- Retired investors are less concerned about all financial factors listed in the survey.
- Canadians who were married or had higher investable assets also felt more comfortable about their financial standing.
“Tools such as the Russell Financial Health Index can be useful in helping Canadians get a picture of where they stand in the current market environment. The Index should be revisited and updated every quarter or any time personal financial circumstances or financial markets evolve,” says Irshaad Ahmad, president of Russell Investments Canada Limited.
Based on the 11 key questions featured on the calculator – ranging from lifestyle choices to thoughts on the economy – the RFHI found that income and the ability to lead an active and healthy lifestyle are the main issues concerning Canadians about their financial health.
Areas of least concern relate to specific family related issues further in the future, such as inheritance and the financial impact of death of a spouse or partner.
“In addition to visiting the RFHI to check up on your financial health, our research has found that the key to a secure and financially healthy future is to plan ahead by working with an advisor. Investors who work with an advisor tend to be more financially secure and do not have to worry about the possibility of outliving their money in retirement,” says Ahmad.
“Now more than ever, investors need advice to get a clear understanding of what is going on in the market.”
About the Russell Financial Health Index
The Russell Financial Health Index gathers its data from a confidential web survey. Based on a user’s answers, a Financial Health Score is assigned, which can be measured against the scores of other Canadian investors who have used the tool.
Each score is a result of analyzing variables that include physical health, personal finances, unexpected events and financial planning. Respondents are also asked questions related to how prepared they feel to ride out changes in their long term investment performance before and during retirement.
The calculator was developed through extensive market research with Harris/Decima among Canadians 42 years of age in early 2008. Of the 800 people who completed the calculator (as of December 31, 2008), over 70% of respondents had household income from $75k to $175k and greater. Close to 75% of respondents had investable assets between $100k and over $1 million.
Findings from the Index will be used to assess and report findings, on a quarterly basis, about how Canadians perceive their financial health, as they deal with different economic environments and changes in their lives.
Russell Investments provides strategic advice, world-class implementation, state-of-the-art performance benchmarks and a range of institutional-quality investment products. With over US$150 billion in assets under management (as of Dec. 31, 2008), Russell serves individual, institutional and advisor clients in more than 40 countries. Russell provides access to some of the world’s best money managers. It helps investors put this access to work in corporate defined benefit and defined contribution plans, and in the life savings of individual investors.
Founded in 1936, Russell Investments is a subsidiary of Northwestern Mutual Life Insurance Company and headquartered in Tacoma, Wash. Russell has principal offices in Amsterdam, Auckland, Johannesburg, London, Melbourne, New York, Paris, San Francisco, Singapore, Sydney, Tokyo and Toronto.
Russell Investments Canada Limited is a wholly-owned subsidiary of Frank Russell Company. For more information, please go to www.russell.com/ca.