A recent retirement savings survey may provide an opportunity for increased engagement between investors and their advisors.
According to a recent Nielsen investor survey commissioned by AGF Management Ltd., seven in 10 Canadians are concerned they have not saved enough for retirement, while more than six in 10 have not taken measures to protect their portfolio against the potential of rising interest rates because they are not sure what to do.
The survey was conducted in February and polled 1,001 Canadians 35-years and older with at least $25,000 in investible assets.
"We know people are not saving enough for their retirement and may not be prepared to deal with future market volatility. What this survey shows is that a growing number of Canadians recognize these as important issues and want to address them," says Blake Goldring, chairman and CEO of AGF Management.
When asked if they were on track to meet retirement goals, 69% of Canadians indicated concern that they have not saved enough for retirement and only one in 10 indicated they were confident they will reach their retirement goals. Surprisingly however, when considering their current investment state relative to where they want to be when they retire, more than half (57%) believe they need to ‘stay the course' and continue with their current investment strategy, indicating a disconnect between beliefs and actions.
Canadians also tend to take little action during down markets. On average, Canadians believe they lost between 10% and 50% of their investment portfolio as a result of the market slide of 2008, but one in five were unable to indicate exactly how much they lost. Even in the face of a substantial equity setback, less than half of Canadians (49%) made adjustments to their portfolio.
Investors recognize investment risks but lack strategies
When it comes to current investing strategies, 56% of Canadians are concerned about the impact of rising interest rates on their portfolio, but three-in-five (59%) claim they do not know what to do about it. Similarly, although 80% of Canadians understand that there are benefits to global diversification, 59% are unsure if investing outside of the country is worth the risk. Overall, one-in-five Canadians say they do not have any investments outside of Canada and an equal number are unsure if they do.
In general, Canadians are seeking investment advice. The survey found that three out of five Canadians have a financial advisor and three quarters of them believe that he or she is important in helping them make investment decisions. As well, 75% of those polled with an advisor are very or somewhat active in planning for their retirement. As age rises, so does the belief that financial advisors are very important.
"We look forward to working with investors and our advisor community to address the critical issues that our survey findings have revealed," Goldring adds.