Affordabilty still a key barrier to Canadians' investment planning: Scotiabank study

• 64 per cent of Canadians cite affordability as a barrier to investing more, up from prior years
• Four-in-ten Canadians plan to contribute to an RRSP this tax year
• One-in-two Canadians started to invest before turning 30
• RRSPs and TFSAs remain popular investment vehicles

TORONTO, Jan. 15, 2013 /CNW/ - Scotiabank's annual Investment Poll shows affordability continues to be a barrier for Canadians hoping to increase their nest eggs before the March 1^st RRSP contribution deadline (64 per cent, compared to 59 per cent in 2011 and 53 per cent in 2010). Like last year, 39 per cent of Canadians say they plan to contribute to an RRSP for the 2012 tax year (unchanged from 2011).

The poll also found that fewer and fewer people feel they have already invested enough (19 per cent in 2012 versus 24 per cent in 2011 and 29 per cent in 2010). Of those investors who cite lack of affordability to investing more, most said they do not have a written financial plan (70 per cent), are not saving for retirement (77 per cent) and feel they are not on track to achieving their retirement goals (80 per cent).

"An investment may be more affordable than you think - the key is to get a solid financial plan in place to help overcome affordability issues," said Mike Henry, Scotiabank Senior Vice President and Head of Retail Payments, Deposits and Lending. "We urge the sixty-four percent who are concerned that they can't afford to invest this year to talk to us. We have experts in every one of our 1100 branches across the country who will work with them to put a plan in place that will help realize individual financial goals."

Encouragingly, the poll found that the number of Canadians who have not started investing has significantly declined since 2011 (17 per cent versus 21 per cent). Consistent with last year, half of Canadians started to invest before the age of 30 years (51 per cent in 2012 versus 48 per cent in 2011). One-quarter of younger investors, those aged 18 to 34 years, have a financial plan (23 per cent).

When asked what major change they would make if they could do it all over again, four-in-10 Canadians (39 per cent) say they would begin investing at a much earlier age. As well, significantly more people say they would spend less and put more of their money into their investments (23 per cent versus 19 per cent in 2011).

"While Canadians rarely get an opportunity for a financial do-over, it is important they take advantage of the investment opportunities they currently have and find a strategy that will work," added Mr. Henry. "Within the framework of a good financial plan, even small contributions can have a big impact over time and get people to the place they want to be financially."

In line with last year's findings, the poll shows most Canadians have an RRSP (56 per cent versus 60 per cent last year) and/or a TFSA (44 per cent versus 48 per cent last year). When it comes to other investment products, most people continue to have savings in a regular savings account (64 per cent), with half having mutual funds (48 per cent) and/or putting their savings in a high interest savings account (48 per cent).

"A good financial plan and investing regularly throughout life is a cornerstone recommendation of Scotiabank's Financial Literacy Strategy introduced last November," said Kaz Flinn, Vice President of Corporate Social Responsibility at Scotiabank. "The strategy encourages people to become lifelong financial learners in order to effectively manage the financial needs that come with different stages of life. Developing a financial plan with an advisor ensures a roadmap is in place to ensure financial readiness for life's ever-changing needs and challenges."

About the polling data
The 2012 Scotiabank Investment Poll was conducted online using Harris/Decima's proprietary panel. A total of 1,003 surveys were conducted from a random sample of panel members aged 18 years and over across Canada. The study was conducted from November 28th to December 13th, 2012.

About Scotiabank
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With more than 81,000 employees, Scotiabank and its affiliates serve some 19 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services including personal, commercial, corporate and investment banking. In December 2012, Scotiabank became the first Canadian bank to be named Global Bank of the Year and Bank of the Year in the Americas by The Banker magazine, a Financial Times publication. With assets of $668 billion (as at October 31, 2012), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.

Background:

Regional Breakdown

Top Barriers to Investing

Reasons for not investing more	Total
		Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
Can't afford it	64%	64%	63%	63%	61%	60%	69%
Already invest enough	19%	21%	23%	20%	18%	15%	15%
Don't have an investment strategy	8%	7%	5%	8%	12%	11%	10%
Need help or advice	7%	5%	5%	9%	10%	7%	5%
Lack discipline	6%	7%	4%	8%	7%	13%	1%
I'm not worried about investing money	6%	8%	4%	6%	4%	9%	7%
I'm retired/living off my pension	3%	5%	2%	3%	3%	4%	4%

Major Change in Investment Planning Behaviour

Major change would make to investment plan	Total	Region
		Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
I would begin investing at a much earlier age	39%	34%	34%	38%	45%	44%	43%
I would spend less and place more into my investments	23%	24%	20%	26%	24%	21%	18%
I don't know what I'd change	15%	19%	18%	15%	16%	9%	13%
Nothing, I would not do anything differently	14%	10%	17%	14%	9%	18%	15%
I haven't done any investment planning yet	9%	13%	10%	7%	6%	8%	11%

Age Began Investing

Age Began Investing	Total	Region
		Atlantic	Quebec	Ontario	Man/Sask	Alberta	BC
Under 20	11%	12%	12%	12%	11%	9%	10%
20-24	20%	18%	20%	26%	12%	19%	8%
25-29	20%	19%	20%	20%	18%	25%	17%
30-39	19%	17%	18%	18%	26%	14%	26%
40 and older	14%	18%	14%	12%	17%	13%	14%
Haven't started investing yet	17%	16%	17%	14%	15%	18%	26%

SOURCE: Scotiabank

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Diana Hart
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