New GDP numbers released Tuesday suggest that those in wealth management will face a more difficult time in the months ahead than their insurance and banking counterparts.
The economy took a step backward in January with the real gross domestic product declining 0.1 percent, better than the 0.2 per cent drop expected by economists but worse than the 0.3 per cent increase in December.
The important number for advisors involves the finance and insurance sector, which saw a 0.2 per cent increase in January, down from a 1.3 per cent increase in the previous month. That’s bad enough, but worse still is the fact that while banking and insurance services saw increases in GDP, financial investment services fell considerably, acting as a drag on overall sector growth.
Yesterday, Stephen Poloz, the Bank of Canada Governor classified the drop in oil prices as having an “atrocious” effect on the Canadian economy although he did soften that by suggesting a lower dollar combined with a stronger U.S. economy should, in the medium term, help exports dig the country out of the current hole.
Advisors, however, might want to plan for a rainy day because the latest GDP stats suggest new clients for the foreseeable future could be hard to come by.