Although there were some depressing findings – the biggest being that 33% of those surveyed fear they will never retire – Noel Archard, Managing Director of BlackRock’s Canadian operations, is quick to point out that policy makers, industry leaders, financial advisors, and all those concerned about the retirement readiness
of Canadians, are working hard to make the transition a happy one.
, which is part of a global initiative by the world’s biggest asset manager, checked the financial pulse of 1,000 Canadians.
Financial advisors faired very well in the survey. Respondents who said they use an investment professional were almost 60 percent more confident of their financial future. In addition, 96 percent of the 290 people surveyed who use an advisor, were somewhat or very satisfied with their advisor’s service. The only fly in the ointment: almost 30 percent of those using an advisor have no idea how their advisor is paid. With CRM2 set to come into effect in July 2016, it’s hopeful that the new disclosure rules will reduce this ambiguity.
BlackRock’s findings follow on the heels of several reports from the Conference Board of Canada which suggest Canadians aren’t exactly readying themselves for retirement. Archard points out that Canadians need to start saving at a younger age, a refrain that’s been tossed out many times in the past.
Certainly, with housing so expensive in many Canadian cities, it’s next to impossible to put aside funds for retirement. The average survey respondent said 43% of their annual income goes to housing costs whether it be for a mortgage or rent plus utilities.
The two most positive aspects of BlackRock’s findings when it comes to advisors: First, the average respondent said they have 23% of their income left over to save and invest after taking care of their living expenses. Secondly, Canadians are holding too much non-income-generating cash which should and could be put to work by financial advisors.
While there definitely are some storm clouds when it comes to retirement readiness, Archard remains optimistic about the future.