- Year-end Index stands at 50, down 1 point from 2022 and 7 from 2021
- Half of Canadians are concerned inflation will continue to increase next year
- Sixty per cent believe the country is currently in a recession
- Financial confidence of those who work with a financial advisor 29 per cent higher than those who do not
WINNIPEG, MB, Nov. 28, 2023 /CNW/ - According to the sixth annual edition of the IG Wealth Management Financial Confidence Index ("the Index"), Canadians' financial confidence continued to decline this year, fueled by concerns over where the economy might be headed in 2024 and the ability of authorities to effectively manage it.
The Index, commissioned by IG Wealth Management ("IG") and conducted in partnership with Ipsos Canada, tracks and reports on Canadians' overall financial confidence based on 10 survey questions relating to IG's Four Pillars of Financial Confidence ("the Pillars"): Personal Financial Outlook, Planning and Literacy, Trust in the Economy and Current Financial Situation.
This year's Index found that, after an uptick in 2021 when the Index stood at 57, the downward trajectory of 51 in 2022 continued into 2023 with the Index landing at 50. Although the Index only fell by one point, this demonstrates that Canadians' faith in the health of the economy was not restored in 2023 and that anxiety about the future persists.
Key findings include:
- While three of the Four Pillars of Financial Confidence remained relatively stable, despite some small dips when compared with 2022, Canadians' Trust in the Economy (down from 43 to 40) saw a significant decline.
- Sixty per cent of respondents believe the country is already in a recession, and more than two-thirds (68 per cent) believe Canada is heading into a recession in 2024. Adding to this anxiety is a belief (65 per cent) that governments and other institutions are not doing enough to address the fiscal issues facing the nation.
- Canadians' optimism about the stability of the economy dropped from 56 per cent last year to 51 per cent in 2023.
- Quebec is the most financially confident region with a 53 Index score, followed by B.C. (51), Ontario (50), Atlantic (49), and Alberta and the Prairies at 47.
- Among the community groups IG is dedicated to helping build their financial confidence, seniors' confidence levels remained stable at 58, while Indigenous (44) and newcomers to Canada (57) fell 6 and 3 points respectively compared with last year.
"While Canadians are feeling relatively stable with their current personal financial situation, there are significant concerns about where things could be headed in the year ahead and in our ability to successfully navigate this uncertainty," said Damon Murchison, President & CEO, IG Wealth Management. "This can, in part, be attributed to the apprehension felt over the last year about the cost of living, rising interest rates and intensifying global tensions."
Cost of Living Raising Concerns About the Future
With half of Canadians (49 per cent) concerned inflation will continue to rise in 2024 and almost 20 per cent ranking the ability to maintain their current standard of living as one of their biggest concerns in the year ahead, Canadians are worried about their ability to manage their money in the future.
In terms of basic needs, Canadians are particularly concerned about housing affordability (62 per cent), soaring food costs (39 per cent), and their ability to save for the future. More than half (56 per cent) reported that, due to the higher cost of living, they are saving less for retirement – particularly among middle-class households.
Financial Advice Linked to Brighter Financial Outlook
Despite this negativity, the study showed there was cause for optimism among those Canadians currently working with a financial advisor. In fact, their confidence levels were 29 per cent higher than those who don't have a financial advisor. Additionally, nine out of 10 respondents who work with an advisor said they believe their financial plan will be able to withstand any economic downturns.
"Given Canadians' apprehension about the future and the rising cost of living, the value of advice has never been more important. Working with a financial professional who can create or revisit a holistic financial plan can help to ensure your financial well-being is protected today and well insulated for the future," said Mr. Murchison.
The IG Financial Confidence Index is part of IG Wealth Management's community program, IG Empower Your Tomorrow, launched in 2018 and dedicated to building the financial confidence of Canadians, especially those that need it most including: Indigenous Peoples, Newcomers, Seniors and Youth. Working with community partners and charities along with employees and clients, IG Wealth Management develops and executes seminars and workshops focused on increasing the financial confidence of these key groups, including the award-winning Money & Youth program which for more than 20 years has been helping high school students, teachers and parents with financial literacy.
Visit IG Empower Your Tomorrow to learn more about the various initiatives IG Wealth Management currently supports.
Founded in 1926, IG Wealth Management is a national leader in delivering 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 $113.5 billion in assets under advisement as of October 31, 2023 and is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's leading diversified wealth and asset management companies with approximately $250 billion in total assets under management and advisement as of October 31, 2023.
The 2023 results presented in this summary report are from an Ipsos survey conducted online from September 26th to October 2nd, 2023. A total sample of 2,000 respondents from across Canada participated in the survey. Weighting was applied to the total sample by age, gender, region and education level to ensure that the composition of the final sample is representative of Canada's adult population according to the latest census data from Statistics Canada. This survey has a credibility interval of +/- 2.2 per cent 19 times out of 20, of what the results would have been had all Canadian adults 18+ been surveyed.
SOURCE Investors Group Financial Services Inc.
English Media Inquiries, Jaimie Roebuck, 647-629-2747, [email protected]; French Media Inquiries, Valerie Dupuis, 514-622-4843, [email protected]
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