Financial optimism during the pandemic: Canadians discovering true value of advice and planning - RBC poll

Tue, Mar 23, 2021 8:00 AM GMT

• Those without an advisor more likely to worry about balancing living today, while trying to save for tomorrow
• Those without a plan more likely to be concerned about retirement finances
• Cash flow and managing debt are both key focus for Canadians during pandemic

TORONTO , March 23, 2021 /CNW/ - Some Canadians are finding financial peace of mind in the midst of the pandemic. Why? They have a financial plan, with savings and investing actions in place to help achieve their goals. They've connected with an advisor. And they're feeling much more confident about their future, according to the latest RBC Financial Independence in Retirement Poll.

A larger group of Canadians, however, is not benefiting from the confidence that having a plan supported by advice can bring. Over half (54%) of Canadians surveyed do not have a financial plan and almost three-quarters (71%) have not connected with a financial advisor in the past year. Some hard truths about this group:

• 67% feel they are behind in saving for their retirement
• 45% don't have a TFSA or an RRSP, which could help them build their savings through investments
• 43% are between the ages of 35 to 54, when conflicting financial demands are often at their peak

"This is a group that could benefit from seeking out financial advice and engaging with an advisor. As we see in our own client research, when people have a financial plan in place, they are more likely to contribute regularly to their savings – including building their retirement fund through investments within their TFSAs and their RRSPs," says Michael Walker , Vice-President & Head, Mutual Funds Distribution & RBC Financial Planning, RBC. "They also are more likely to have a stronger sense of how to balance day-to-day expenses while building a rainy day fund and saving for the longer term."

Pandemic-related poll findings
The poll also found that cash flow ranked highest (38%) in what Canadians reported they are paying more attention to now, with one-quarter (26%) reporting that their cash flow has worsened since the onset of the pandemic, leaving them with less money left over after they pay necessary expenses. Of those experiencing cash flow impact, the majority (74%) say this is giving them high anxiety about their financial future, compared to the early days of the pandemic.

Other areas of increased focus during the pandemic for Canadians surveyed:

• The general state of their finances (32%)
• Managing their debt (27%)
• Having enough money on hand if the pandemic worsens (25%)
• The value of their investments (24%)
• The value of their retirement savings (16%)

Also, Canadians have shifted their focus to short-term financial priorities during the pandemic. Almost half (46%) of those polled identified managing debt as a top financial priority, up six points from last year, while saving for retirement dropped seven points to 49%, the lowest percentage since 2012. Alongside this short-term focus, Canadians also identified several concerns about their future finances:

• 71% worry they won't be able to balance short-term versus long-term financial priorities
• 47% don't think that they've saved enough
• 29% are fretting a lot about how to be financially prepared for the unexpected

"Whatever you have in mind for your future, it's crucial to have a plan – a roadmap – to guide your financial decisions. It's also important to take the time to have a no-obligation conversation with an advisor," Walker says. "We make it easy for you to go online and create a personalized plan through MyAdvisor. We connect you online to an interactive plan, where you can see your cash flow, net worth and your goals, and explore forward-looking scenarios. MyAdvisor also connects you to the expertise of an RBC advisor in your local community, via live video, phone or in-person within a branch to help guide you along the way."

Walker adds that an online, interactive plan connects clients more strongly to their finances. "An interactive plan shows you the potential long-term impact of any changes you make to savings or investments. In effect, you can see what your financial 'tomorrow' could look like, today."

There are intangible benefits to having a financial plan too. When respondents with a plan were asked how this made them feel about their financial future, 86% responded with positive sentiments, including 'confident' 'optimistic' and 'calm'.

"These positive sentiments were also reflected in responses from Canadians we surveyed who have an advisor. The objective voice of an advisor can be invaluable in setting out your options for you in a non-judgmental way – ensuring that you know what your possibilities are, so you can make the financial changes you'd like to see in your life," Walker explains. "It's hard to put a value on what that reassurance, along with a sense of confidence, optimism – and calm – is bringing to Canadians right now."

About the RBC 2021 Financial Independence in Retirement Poll
A total of 2,000 surveys were completed online by Ipsos among Canadians aged 18+ from October 30 to November 7, 2020 using the Ipsos I-Say Panel for this poll, which has been conducted on behalf of RBC for the past three decades. Quota sampling and weighting was employed in order to balance demographics and ensure that the sample's composition reflects that of the actual population of Canadians, according to Census data. The precision of online polls is measured using credibility interval. In this case, the results are accurate to within ± 2.5 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been surveyed. Credibility intervals will be wider for smaller subsets of the population. Where appropriate, attitudes and opinions are tracked back to previous years' polls.

Source: Stockhouse