Majority of Canadians are Investing, but Many Still Prefer Cash Savings

TORONTO, March 2, 2020 /CNW/ - According to the annual BMO RRSP Study, while 77 per cent of Canadians have investments, Canadians are nearly split when it comes to investing their savings (53 per cent) or keeping them as cash (47 per cent).

The annual survey, conducted by Pollara Strategic Insights, found that millennials are more likely to hold savings in cash (57 per cent), compared to Gen Xers and Boomers who are more likely to put their savings into investments (54 per cent and 64 per cent respectively). Regional data suggest Canadians living in Atlantic provinces are the most likely to keep their savings in cash rather than investments, with 51 percent choosing cash, compared to only 43 per cent of those living in the Prairies.

Among Canadians who are investing, a healthy majority (62 per cent) have cash in their TFSAs, representing over 40 per cent of their account holdings. Similarly, mutual funds and cash are the most popular assets held in Canadians RRSPs, with 42 per cent of assets in mutual funds and 22 per cent of assets in cash.

Asset Invested	Percentage of Canadians that Include asset in a TFSA	Asset Makeup in a TFSA	Percentage of Canadians that Include asset in a RRSP	Asset Makeup in a RRSP
Cash	62%	41%	32%	22%
Mutual Funds	43%	24%	45%	42%
Stocks	29%	14%	22%	14%
GICs	26%	12%	20%	12%
Bonds	15%	5%	14%	6%
ETFs	15%	4%	11%	4%

"Every Canadian is unique with their personal investing strategy. It is important to understand the benefits of owning a diversified investment portfolio via different investment solutions," said Robert Armstrong, Director, Multi-Asset Solutions, BMO Global Asset Management. "There is a place for cash or short-term investments when meeting your short-term goals. However historical evidence suggests individuals who hold short-term investments, such as cash, to meet their long-term goals clearly miss out on creating longer-term wealth."

Investor Knowledge and Financial Planning

Although Canadians are investing, only one third of Canadian investors believe they are knowledgeable with understanding the ins and outs of it, and 67 per cent of Canadians are unable to identify the differences between an RRSP and a TFSA. When making investment decisions, most Canadians believe financial advisors are needed to help them meet their financial goals.

The survey revealed:

• Atlantic Canadians rely on advisors the most (78 per cent), compared to Albertans and Ontarians who rely on advisors the least (62 per cent and 65 per cent respectively).
• Among Canadians who rely on advisors, one third of Canadians (36 per cent) are not comfortable making financial decisions without professional advice, and 25 per cent do not know how to manage investments on their own.
• Majority of Canadians (66 per cent) talk with their financial advisor at least a few times a year, with 22 per cent talking once every few months and 37 per cent doing so a few times a year.
• Half of Canadians point to financial advisors being better equipped to help them meet their goals as the main reason for working with one.

"As more Canadians grow to understand the importance of long-term investing, there are opportunities to engage professionals to ensure their investments and portfolios are aligned with their goals, timelines and risk tolerance," said Mr. Armstrong. "All Canadians should strive to develop a comprehensive financial plan. A financial professional can help understand and identify the right mix of investments to allow Canadians to take their plan to the next level in order to achieve their long-term goals and dreams."   

For more information on BMO investment options, please visit www.bmo.com/investments.

The BMO RRSP Survey was conducted by Pollara Strategic Insights via an online survey between November 26 and December 3, 2019, with an online sample of 1,500 adult Canadians. Data has been weighted using the latest census information to be representative in terms of age, gender and region. The margin of error for a probability sample size of 1,500 is ± 2.5% 19 times out of 20.

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $880 billion as of January 31, 2020, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group

Media Contacts: Olivia Fraczkowski, Toronto, [email protected] | [phone]; James DeCosimo, Toronto, [email protected] | [phone]