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INVESTOR RESEARCH: THE VALUE OF ADVICE

Presentation by Ipsos Reid to:

The Investment Funds Institute of CanadaRetirement Savings Luncheon

May 20, 2010

Agenda

Overview of the Canadian investor

Investors and the value of financial advice

© 2010 Ipsos

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Information Sources

CANADIAN FINANCIAL MONITOR (subscription survey)An on-going survey among Canadian households about financial products and

Three Ipsos Reid surveys:

An on going survey among Canadian households about financial products andservices, including the use of advisors. To track five-year trends, a specialanalysis was conducted for IFIC among over 3,200 households whoparticipated in this survey during both 2005 and 2009.

CANADIANS AND FINANCIAL ADVICE (subscription survey)A survey among Canadians about professional financial advisors, conductedevery two years (2008 and up coming later in 2010) The most recent surveyevery two years (2008 and up-coming later in 2010). The most recent surveyamong over 3,100 investors, which includes both a cross-section of investorsand an ‘over-sample’ among higher net worth individuals.

CSA INVESTOR INDEX STUDY(commissioned by the CSA Investor Education Committee)A survey among over 6,300 Canadians about investing, financial advice and

t f d St d lt l d b th CSA i th F ll f 2009

© 2010 Ipsos

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exposure to fraud. Study results were released by the CSA in the Fall of 2009.

About the Canadian Financial Monitor

On-going Canadian market research survey: since 1999Subscription-based: widely purchased by financial institutions and government agenciesgovernment agenciesTracks Canadian households’ use and perceptions of financial products & services: banking, investments, borrowing, payments, insurance as well as the distribution channels usedinsurance, as well as the distribution channels usedLarge sample size, each year 12,000 households are surveyed: projectable to the national population base

IFIC commissioned a special analysis of the Canadian Financial Monitor database to investigate households using/not using financial advisors in 2005 and 2009: sample of 3 200 householdsfinancial advisors in 2005 and 2009: sample of 3,200 householdsFindings from this analysis have been incorporated into various IFIC submissions/presentations

© 2010 Ipsos

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When looking for information about investing, what sources have you ever used?

55%

36%

A financial advisor

General media 36%

35%

General media

Financial or business media

29%

29%

Financial institution's website

Family and friends (other than a parent)

24%

20%

Information/newsletters sent from a financialadvisor or institution

Other internet sources (blogs chat rooms etc ) 20%

20%

Other internet sources (blogs, chat rooms, etc.)

Books on financial markets, the economy andinvesting

© 2010 Ipsos

5Source: CSA Investor Index Survey by Ipsos Reid Base: Respondents who have looked for information about investing (n=3150)

17%Mutual fund prospectuses / corporate annualreports

How important are the following sources of information for young people to learn aboutpersonal finances and investing?

46% 38% 85%A financial advisor

Fi i l i i i ' b i 17%

13%

47%

50%

64%

64%

Financial institution's website

Information/newsletters sent from a financialadvisor or institution

17%

14%

45%

48%

62%

61%

Research reports from an investment analyst

Books on financial markets, the economy andinvesting

13% 49% 61%

investing

Financial/business media

Mutual fund prospectuses /corporate annual16%

16%

45%

41%

60%

57%

Mutual fund prospectuses /corporate annualreports

Lawyer or accountant

© 2010 Ipsos

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Very important Somewhat important

Source: CSA Investor Index Survey by Ipsos Reid Base: All respondents (n=6,319)

Primary Source Of Financial Information

50%Advice from professional

financial advisor

14%

11%

General media(newspapers/magazines/TV)

Family/friends 11%

8%

Family/friends

Financial providers' internetsite

3%Other internet financial sites

or information

Fi i l/b i di 4%

3%

Financial/business media

Lawyer or accountant

© 2010 Ipsos

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Q6. Please indicate your primary source of financial information - that is, the source you have used most often in the past 12 months? Source: Ipsos Reid ‘Canadians & Financial Advice’. ’Base: use at least one source of information

Self-Assessed Knowledge About InvestingUAll C di Use

advisor

12%10%Very knowledgeable

All Canadians

12%

54%46%

y g

Somewhat knowledgeable 54%

30%

46%Somewhat knowledgeable

30%35%Limited knowledge

4%10%Little or no knowledge about investing

© 2010 Ipsos

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Q17. Which of the following statements best describes your level of knowledge about investing? Source: Ipsos Reid ‘Canadians & Financial Advice’ Base: All respondents

Why First Used a ProfessionalFinancial Advisor

37%

37%

Wanted advice about how to plan/save for myfuture

Wanted advice about RRSPs

36%

35%

New to investing and wanted advice

Wanted retirement savings plan

23%

17%

Wanted advice about how to get betterreturns

Had accumulated savings/investmnets

15%

14%

9%

Was referred to an advisor

Was about to retire/just retired

Sold/purchased property 9%

7%

6%

Sold/purchased property

Received an inheritance

Entering the workforce and needed advice

© 2010 Ipsos

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Why di you first make use of a professional financial advisor? (MULTIPLE RESPONSES ACCEPTED)Source: Ipsos Reid ‘Canadians & Financial Advice’. ’Base: use a financial advisor (n=1,342)

g

Importance of Financial AdviceVersus 1 or 2 Years Ago

Financial advice is

Use an advisor

50%

Financial advice ismore important tome than 1-2 years

ago

47%Financial advice isjust as important

1 2as 1-2 years ago

Fi i l d i i3%

Financial advice isless important

than 1-2 years ago

© 2010 Ipsos

10Q58. Thinking about the importance of financial advice for your financial matters, would you say that Source: Ipsos Reid ‘Canadians & Financial Advice’ Base: Used a financial advisor in past 12 months

Attitudes About Financial Advice (cont’d)

74%

I feel confident that I will have enough money to retire comfortably% agree (‘6’ to’10’ on 10-point scale)

74%

52%

© 2010 Ipsos

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Households with an Advisor Households with no Advisor

Source: Ipsos Reid ‘Canadian Financial Monitor’, special analysis for IFIC


72%

I am satisfied with my household’s current financial situation% agree (‘6’ to’10’ on 10-point scale)

53%


© 2010 Ipsos

12Source: Ipsos Reid ‘Canadian Financial Monitor’, special analysis for IFIC


71%

A year from now, I will be financially better off than I am today% agree (‘6’ to’10’ on 10-point scale)

71%

57%


© 2010 Ipsos

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In the future I will manage more of my investments myself andnot rely on an advisor

% disagree (‘1’ to’6’ on 10-point scale)

81% disagree

52% disagree

© 2010 Ipsos

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Types of Investments - RRSPs

69%69%

29%


© 2010 Ipsos


Types of Investments - RRIF

55%

RRIFAge 65+

18%

13%RRIF

Age 65+4%

Households with no AdvisorHouseholds with an Advisor

Age 65+

© 2010 Ipsos



Household Average Investable Assets ‐ Registered and Unregistered

$180,836

60.3% 66.1% 64.6% 65.5% 61.9%

Ratio Average Registered Investment to Average Total Investment

$68,904

$30,684$31,573

$86,609$91,562

$55 924 $59,988

$111,932$20,119

$ ,

$30,022

$59,299

$18,102

$39,180

$55,924 $ ,$11,920

Under $35,000 $35,000 to $54,999 $55,000 to $69,999 $70,000 to $99,999 $100,000 or more

© 2010 Ipsos

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Household Income (2009)

Avg. $ Registered Avg. $ UnregisteredSource: Ipsos ReidCanadian Financial Monitor


$197,273

$214,587

68.7% 43.4% 65.2% 67.5% 67.0% 56.7% 67.6% 58.6% 66.2% 64.6%


$65,079

$72,503$164,542

$138,358

Advised

Non ‐Advised

$37,400 $43,618

$53,358

$49,041

$119,318$125,348

$81 918 $81 730

$132,194

$111,184

$142,084

$89,317$44,103

$81,918

$4,877

$81,730

$18,301 $16,514$25,841

$ ,

$6,349

$8,803 $12,604

$18,262

$11,227

$27,104 $29,119

© 2010 Ipsos

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Under $35,000 $35,000 to $54,999 $55,000 to $69,999 $70,000 to $99,999 $100,000 or more

Household Income (2009)Avg. $ Registered Avg. $ UnregisteredSource: Ipsos ReidCanadian Financial Monitor


$158,049

80.4% 64.9% 73.7% 47.2%


$32,447

$83,466

$123,494

$29,772

$84,886

$55 115

$91,047

$74,583$8,011

$40,913

$32,903

$55,115

<45 45 54 55 64 >=65

© 2010 Ipsos

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<45 45‐54 55‐64 >=65

Age of Head of Household (2009)Avg. $ Registered Avg. $ UnregisteredSource: Ipsos ReidCanadian Financial Monitor


$246,752

$272,761

$60,842$132,176

82.4% 76.7% 71.7% 61.1% 75.3% 73.3% 51.5% 42.1%


$39,608

$140,155Advised Non ‐Advised

$100,548

$185,910

$140,585$13,944

$20 089 $12 408$38,246

$79,074

$51,649$46,462

$66,064

$65,130

$19,022$31,561 $34,054 $27,818

$5,765

$20,089 $12,408$24,787

<45 45‐54 55‐64 >=65

© 2010 Ipsos

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<45 45 54 55 64 > 65Age of Head of Household (2009)

Avg. $ Registered Avg. $ UnregisteredSource: Ipsos ReidCanadian Financial Monitor

Allocation of Investable Assets - 2009

32%

51%

able

Ass

ets

68%age

of In

vest

68%

49%Per

cent

a

Advice No Advice

© 2010 Ipsos


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416.324.2900www.ipsos.ca

© 2010 Ipsos

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