Sun Life: Financial advisors more optimistic about U.S. capital markets than Canada in the year ahead

TORONTO, June 26, 2012 – Canada’s financial advisors are more optimistic about the performance of U.S. markets compared to any other major global equity market, including Canada, over the next 12 months according to the Sun Life Advisor Sentiment Index released today by Sun Life Global Investments. The survey, conducted by Ipsos Reid between April 23 to May 4, 2012, measures Canada’s financial advisors’ sentiments on capital markets and key economic factors.

Seventy-eight per cent of advisors are optimistic about U.S. markets (including the Dow Jones Industrial Average and the S&P 500 Index) compared to 60 per cent of advisors who say they are optimistic about Canada’s S&P/TSX Composite.

“How well the U.S. economy is doing continues to surprise many people and Canada’s financial advisors are taking notice of this upward trend,” said Sadiq S. Adatia, Chief Investment Officer, Sun Life Global Investments. “We have been optimistic about the U.S. markets since last year and think they offer the most opportunities over the other major equity markets, followed by emerging markets.”

Advisors see a variety of global economic factors threatening the Canadian economy over the next year. More than half consider a major downturn in China to be among the three greatest threats.

  • Fifty-seven per cent of advisors said a significant slowdown in the Chinese economy could pose a threat to Canada in the next 12 months.
  • Forty-three per cent of advisors said the same about a breakup of the Eurozone.
  • Thirty-nine per cent of advisors said a sovereign debt crisis is among the top three risks to Canada.
  • Weak consumer spending (36 per cent), the price of oil (35 per cent) and inflation (22 per cent) also pose threats to our economy.

“While advisors raise valid concerns, we have also found through our past research that some domestic issues threaten the Canadian economy,” said Adatia. “We believe Canadians continue to add debt even though they’re already shouldering significantly large amounts. Savings are low and the housing market grows more overheated every day.”

The majority of advisors (71 per cent) believe Canada’s overnight interest rate will be higher on June 30, 2013 than it is today. While 69 per cent believe the Consumer Price Index will rise either one or two per cent over the next 12 months.

The effects of the 2008 financial downturn are still being felt by Canadian investors:

  • Advisors believe almost half (48 per cent) of their clients are more risk adverse since 2008.
  • Thirty-seven per cent believe their clients are pessimistic about the current market conditions.
  • Fear of losing capital (62 per cent) is the number one concern advisors hear from their clients followed by fear that their investment performance won’t be enough to achieve their lifestyle goals (61 per cent).
  • The money invested won’t be enough for retirement (60 per cent) and fear that if markets crash, clients won’t have enough time to make up any losses before retirement (59 per cent) are also concerns advisors hear.

Listen to Sadiq S. Adatia, Sun Life Global Investments Chief Investment Officer, as he comments on the Index.

Read the full report on the Advisor Sentiment Index for more key findings and results.

These are some of the findings of an Ipsos Reid poll conducted between April 23 and May 4, 2012 on behalf of Sun Life Financial. For this survey, a sample of 475 Canadian financial advisors was interviewed online. The survey participants represent a cross-section of the Canadian financial services industry including affiliated and independent financial advisors. More than two thirds (70 per cent) of the survey respondents are members of the Mutual Fund Dealers Association (MFDA) and a third (35 per cent) are members of the Investment Industry Regulatory Organization of Canada (IIROC). A survey with an un-weighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of +/- 3.9 percentage points, 19 times out of 20, of what the results would have been had the entire population of Canadian financial advisors been interviewed. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error. Percentages reported in this summary are rounded to the nearest whole number.

About Sun Life Global Investments (Canada) Inc.

Sun Life Global Investments brings together the strength of one of Canada’s most trusted names in financial services with some of the best asset managers from around the world. With a focus on risk management, our rigorous selection and monitoring process provides access to leading asset managers who use insight and innovation to manage high quality investment solutions for Canadian investors. For more information, visit:

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2012, the Sun Life Financial group of companies had total assets under management of $494 billion. For more information please visit