Concerns about the economy reduce the confidence of Canadians

  • The year-end index stands at 51, down 6 points from 2021

  • Canadians aged 35-54 reported the biggest drop in trust, down 17% from 2021

  • British Columbia least financially confident region, down 20% from 2021

  • Trust levels of those who work with a financial advisor are 28% higher than those who don’t

WINNIPEG, MB, November 9, 2022 /CNW/ – Market volatility, inflationary pressures and rising interest rates are impacting the financial confidence of Canadians, according to the fifth annual IG Wealth Management Financial Confidence Index. This is reflected in all demographic groups and all regions of Canada. Additionally, most expect the country to enter a period of recession in early 2023, fueling concerns.

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The index, commissioned by IG Wealth Management (“IG”) and produced in partnership with Ipsos Canada, tracks and reports on the overall financial confidence of Canadians through 10 survey questions that span IG Four pillars of financial confidence (“the pillars”): Personal financial outlook, planning and literacy, confidence in the economy and Current financial situation.

The index found that Canadians’ overall financial confidence at the end of the year was 51, down 11% from the same period in 2021 (57). Other key findings include:

  • While Canadians remain relatively confident about the state of their personal financial situation, as evidenced by results that were broadly in line with the 2021 Index scores in the Personal financial outlook (54 in 2022), Planning and Literacy (56) and Current financial situation (52) categories, their perspectives and Confidence in the economy (43) was primarily responsible for the decline in overall trust.

  • Of all age groups, confidence among people aged 34 to 55 (the so-called ‘sandwich generation’) has fallen the most this year (down 17% from 2021 to 43), reflecting concerns regarding rising mortgage rates and retirement savings being impacted by market volatility.

  • British Columbia saw the largest drop in trust of any region, with a score of 47, down 20% from 2021 (59). Residents of the province are particularly distressed by rising interest rates and the cost of living and are the most anxious Canada on their finances.

  • Nearly 40% of Canadians believe that professional financial advice is more important than ever given current economic conditions.

  • Among the community groups IG is dedicated to helping build financial confidence, Indigenous people increased one point (50) from a year ago, while seniors (58) and newcomers to Canada (60) lost 6 and 4 points respectively.

“People are generally feeling good about their personal financial situation. However, after a year in which major world events and the lasting effects of the pandemic rocked financial markets and contributed to high inflation for decades , they feel much less confident about the overall economy and where things will go in the coming year,” observed Damon Murchison, President and CEO, IG Wealth Management.

Economic conditions a major contributor to declining confidence

With respect to the Canadian economy, the study found:

  • Most Canadians (55%) believe the country is currently in a recession and more than two-thirds (68%) believe there will be a recession in 2023.

  • Almost half (46%) believe that the inflation rate will increase in 2023.

  • Only a third (30%) say financial authorities are responding effectively to the situation.

In addition, as the Bank of Canada targets inflation by raising interest rates, the dream of home ownership is increasingly out of reach for young Canadians. More than a third (36%) of people aged 18-34 said they would postpone their homeownership goals. However, more Canadians (22% in 2022, compared to 12% in 2021) believe housing prices will become more affordable in the coming year.

The value of professional advice

The study also found that the overall financial confidence of Canadians who work with a financial advisor (59) is significantly higher than those who do not (48), reflecting the important role that professional advice and financial planning can play out in times of economic uncertainty.

“Canadians are trying to understand what’s going on around them and how it might impact their personal situation, so it makes sense that those who have access to professional advice feel more confident,” Murchison noted. . “People who work with an advisor tend to feel more financially confident and report better results in their ability to save, and even their ability to enjoy life, because they worry less about their lives. finance.”

The IG Financial Confidence Index is part of the IG Wealth Management community program, GI Empower your future, launched in 2018 and dedicated to building financial confidence for Canadians, especially those who need it most, including: Indigenous peoples, newcomers, seniors and youth. Working with community partners and charities as well as employees and clients, IG Wealth Management develops and delivers seminars and workshops focused on increasing the financial confidence of these key groups, including the award-winning Money & Youth program that has been helping high school students, teachers and parents with financial literacy for over 20 years.

Visit IG energizes your future to learn more about the various initiatives currently supported by IG Wealth Management.

About IG Wealth Management

Founded in 1926, IG Wealth Management is a national leader in providing personalized financial solutions to Canadians through a network of advisors located across Canada. In addition to an exclusive family of mutual funds and other investment vehicles, IG offers a wide range of other financial services. IG Wealth Management has $108.3 billion in assets under advisement at October 31, 2022 and is a member of the IGM Financial Inc. (TSX:IGM) group of companies. IGM Financial is one of from Canada leading diversified wealth and asset management companies with approximately $245.7 billion of total assets under management and advice as of October 31, 2022.

About the IG Financial Confidence Index

The 2022 results presented in this summary report come from an Ipsos survey carried out online from September 13e at September 27e2022. A total sample of 2,600 respondents Canada participated in the survey. Weighting was applied to the total sample by age, gender, region and level of education to ensure that the composition of the final sample is representative of from Canada adult population according to the latest census data from Statistics Canada. Since an online sample is not considered probabilistic, Ipsos does not apply a margin of error to this survey. The accuracy of Ipsos non-probability surveys is measured using a credibility interval. The credibility interval for a survey of 2,600 respondents is ±2.3 percentage points, 19 times out of 20. The credibility interval will be wider among subsets of the population.

SOURCE IG Wealth Management

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