We might expect that a major life event would prompt people to ask for professional financial advice. But when asked about a variety of potential events including retiring or receiving an inheritance, only a small segment of Canadians could anticipate that these would cause them to seek advice. Perhaps part of the problem is that about half (51%) of Canadians describe themselves as more focused on shorter term needs rather than longer term goals (10+ years in the future).
What prompts Canadians to begin investing? Definitely not life events. With the exception of the 32% who felt that the decision to invest might be made if they were to receive an inheritance, far fewer could foresee any other event that would be a catalyst to invest.
Those Canadians who are ‘savers only’ say that investing in securities (e.g. stocks, bonds, mutual funds or other securities) would more often occur if they had ‘extra’ money (56%), if they could start with very little money (35%) or if there was someone they trusted to advise them (26%).
38% of Canadians say they use professional financial advisors, while an equal proportion (41%) have never used an advisor. But even those using advisors often appear to seek advice to address particular needs in the moment, rather than as an aid to help them plan for their life long needs. Prevailing attitudes towards investing may help explain this one-transaction-at-a-time mentality. For instance, 36% of Canadians do not agree that they "take financial planning seriously,” while 51% say they are more focused on shorter term goals rather than longer term ones.
Most Canadians are pleased with their advisors, but those receiving advice at retail branches of the country’s biggest banks are generally less satisfied than others.
The majority of Canadians now use online sources to inform their investment decisions, but it’s the country’s younger investors who are clearly leading the web-based charge.
Canadians young and old are routinely using online sources to make long-term financial decisions but the country’s biggest banks are still the primary go-to for those who use a professional financial advisor. 43% of Canadians say they use bank branch advisors while 19% get their advice at a bank-associated full service brokerage firm.
It’s important that investors seeking professional advice understand what their financial advisor offers and whether this relationship can help them achieve the financial future they desire.
Focus less on short term needs when seeking advice and more on longer term goals and key life events that may have a profound impact on your financial health.
There are no shortages of ways to obtain financial advice in Canada. Do some research first through family and friends, online and other resources and shop around to make sure your advisor is right for you.
Enough with the mad dash visit to the bank during RRSP season each year. Think ahead and book some time with your financial advisor to review your long-term financial plan on a more regular basis.