IG Wealth Management study uncovers a gap between understanding and action in financial planning
IG Wealth Management's (IG) annual tax study, in collaboration with Pollara Strategic Insights, reveals a significant gap between Canadians' recognition of the importance of year-round tax planning and their actual prioritization of it.
The study shows that while 57 percent of Canadians appreciate the significance of continuous tax planning, only 27 percent make it a year-round priority.
Moreover, just 33 percent are very confident in their ability to leverage all available tax breaks, and a mere 17 percent are knowledgeable about the tax implications of life-changing events or stages.
“Canadians can benefit from year-round tax planning that ideally should be wrapped into their overall financial plan,” stated Damon Murchison, president, and CEO at IG Wealth Management.
He highlighted the importance of year-round tax planning for reducing tax bills, maximizing tax credits and deductions, and enhancing wealth accumulation.
The study also sheds light on the often-overlooked tax implications of major purchases and life events. Only one-third of Canadians consider the tax implications before making significant purchases such as buying a home, secondary property, car, or investing in home renovations.
Similarly, only 17 percent are knowledgeable about how life stages or events like getting married, having children, retiring, or passing on an estate can introduce new tax considerations.
“It's a concern that many lack understanding of the tax implications of major purchases and life events,” Murchison noted. A financial advisor, he suggested, plays a crucial role in building knowledge around tax implications and integrating this insight into a broader financial plan.
Despite the value of professional tax advice, only 54 percent of Canadians seek it, and among those, only 17 percent consult with a financial advisor.
Murchison concluded, “An advisor is unique in that they take a comprehensive approach to financial planning, building an integrated and personalized plan that accounts for every aspect of your financial life in the most tax-efficient manner.”
