VANCOUVER, May 30, 2011 /CNW/ - A global survey from HSBC revealed today
that those who have a financial plan in place enjoy a clear 'planning
premium' with hard financial benefits, yet 65% percent of Canadian
respondents reported not having a financial plan for their future.
The sixth Future of Retirement study, The Power of Planning, shows:
65% of Canadian respondents reported not having a financial plan for
their future compared to 50% of global respondents.
On average, Canadian planners have amassed nearly two-and-a-half times
(245%) more money in their retirement plans compared to non-planners.
Of those Canadians who worry about coping financially when they retire,
63% report not having saved enough as their number one concern. Only
49% of global respondents shared this worry.
Not having enough money is seen as a key stumbling block to undertaking
a plan with 73% of Canadians who do not have a plan citing this as the reason.
The 'planning premium'
Globally, the overarching finding of the sixth Future of Retirement
study is the significant financial benefits reaped by those who plan
financially for their future.
Planners hold a much broader range of retirement and non-retirement
assets than those who do not have a plan and they amass a significantly
higher value of assets. Planners also enjoy soft benefits such as a
much more positive outlook towards later life and being less worried
about coping financially in retirement.
The advice advantage
Alongside the planning premium, the findings also show a clear 'advice
advantage' for those who seek professional financial advice. In
general, advice-seekers report greater levels of financial wealth than
Globally, those people with a plan who have taken professional financial
advice enjoy the benefits of not only the broadest range of financial
assets, but also the highest value of assets: the best of both worlds.
Planners who have taken advice have amassed nearly two and a half times
(245%) the average Canadian retirement assets and nearly nine times
(864%) the non-retirement assets of those who do neither.
Despite these advantages, Canada had one of the lowest percentages of
respondents who indicated having a financial plan for their future. Of
the seventeen countries surveyed Canada placed 14th, with 35% of respondents reporting having a strategy in place. This
puts Canada behind Malaysia (84%), China (76%), India (76%) and Taiwan
(60%). The only countries that scored lower than Canada were France
(30%), Mexico (25%) and Argentina (25%).
Trends to watch
While Canada did tend to score lower when it comes to financial
preparedness it is worth noting that Canadians are not alone. There are
major global shortfalls in retirement preparedness; overall 41% of
respondents feel poorly prepared for retirement and two-thirds
expressed a concern that they will not be able to cope financially in
The emergence of a major East-West divide in retirement perceptions was
also clear. The factors driving a positive mindset seem to be closely
associated with benign economic conditions and growing wealth in the
emerging markets where, even during the financial crisis and recent
global economic downturn, there has been continued growth in GDP,
fuelling rising household incomes and an increased ability to undertake
a strong savings habit.
An encouraging picture also emerged among younger respondents globally,
with relatively high numbers undertaking financial planning and at
earlier ages than previous generations. This is especially true for
younger women who are more engaged in this area than those in their
50s. 47% of women ages 30-39 indicate having a financial plan in place
compared to 38% of women ages 50-59.
Canadians understand the importance of saving for retirement. Not having
to worry about money was the number one response from Canadians (74%)
when asked what was extremely important to achieve a happy retirement,
but there seems to be a disconnect when it comes to planning and
Below are five steps that apply insights from this year's Future of
Retirement survey, while breaking financial planning down into
Step 1: Establish some clear goals, both short term and long term
Step 2: Benchmark yourself: Are you on track to meet your goals?
Step 3: Develop a comprehensive financial plan
Step 4: Implement the plan
Step 5: Keep your plan under review
Overall we can see that those who take the time to put a financial plan
in place are far more likely to enjoy a positive retirement. Where
people are actively planning ahead, there are genuine benefits to be
enjoyed, such as increased access to private pensions and savings
products as well as a more positive outlook on retirement.
Margaret Willis, Executive Vice President, Retail Banking and Wealth
Management, HSBC Bank Canada said: "Canadians should be more aware of
their long-term financial needs and implement a plan to address these
needs, even if they are starting out with a limited amount of money. A
small investment now can provide real peace of mind and a positive
outlook on retirement later in life."
Notes to editors:
The countries surveyed for The power of planning were: Argentina, Brazil, Canada, China, France, Hong Kong, India,
Malaysia, Mexico, Poland, Saudi Arabia, Singapore, South Korea, Taiwan,
UAE, UK, and the US. The report surveyed 17,849 'financial
trendsetters' of working age (mostly between 30 and 60 years) in 17
Financial trendsetters tend to be more educated than average, live in
urban areas and have greater access to the internet. Those in emerging
economies tend to share the same attitudes and behaviour of those in
the developed world, including attitudes towards retirement planning.
The research was conducted online and survey data was collected on the
basis of both household and individual incomes. The report refers to
three distinct income groups: high income with gross annual household
income over US$100,000; middle income with gross annual household
income of US$30,000 to US$100,000; and low income with gross annual
household earnings below US$30,000.
The Future of Retirement: The power of planning
HSBC's Future of Retirement programme is a world-leading independent
study into global retirement trends. It provides authoritative insights
into the key issues associated with ageing populations and increasing
life expectancy around the world. The 2011 report, The power of planning, is the sixth in the series and is based on interviews with more than
17,000 people in 17 countries. Since the Future of Retirement programme
began in 2005, more than 110,000 people worldwide have been surveyed.
The programme has positioned HSBC at the forefront of retirement thought
leadership, and has raised awareness of HSBC as a leader in the growing
retirement services market. The report findings help HSBC to
understand and meet the needs of its 95 million customers worldwide.
For further information on this and previous reports, visit www.hsbc.com/futureofretirement
HSBC Bank Canada, a subsidiary of HSBC Holdings plc, has more than 260
offices, including over 140 bank branches, and is the leading
international bank in Canada. Headquartered in London, the HSBC Group is one of the world's largest
banking and financial services organisations and one of the industry's
most valuable brands. We provide a comprehensive range of financial
services to around 95 million customers through two customer groups,
Retail Banking and Wealth Management (including consumer finance) and
Commercial Banking, and two global businesses: Global Banking & Markets
and Global Private Banking.
Our international network covers 87 countries and territories in six
geographical regions; Europe, Hong Kong, Rest of Asia-Pacific, the
Middle East, North America and Latin America.
A leading consultancy firm serving the banking, insurance and asset
management sector, Cicero specialises in public policy consulting as
well as global thought leadership and independent market research.
Cicero was established in 2001 and now operates from offices in London,
Brussels, Washington and Singapore.
SOURCE HSBC Bank Canada
For further information:
| Ernest Yee |
Vice President, Corporate Affairs
HSBC Bank Canada
| Sharon Wilks |
Assistant Vice President, Public Affairs
HSBC Bank Canada