TORONTO, Sept. 22, 2014 /CNW/ - The Investment Funds Institute of Canada (IFIC) today responded to new research released by the Conference Board of Canada that examined the potential impact of increased use of financial advice on long term household income and the domestic economy.
The study, Financing the Future: Boosting Retirement Readiness and the Economy Through Financial Advice, which was undertaken at the request of IFIC, found that a 10 percent increase in the number of advised households would, over time, lift real GDP $2.3 billion above the baseline.
"The industry welcomes this new research that demonstrates the long term economic benefits of increased savings levels associated with financial advice," said Joanne De Laurentiis, president and CEO of IFIC. "Substantial independent research previously had affirmed the benefits of financial advice to individual savers. To our knowledge, this is the first time that independent researchers have modeled the larger economic impact of higher saving rates based on the quantifiable asset-building benefits of using a financial advisor."
The Conference Board used its widely respected national econometric forecasting model to quantify the impact of increased savings that would be generated if just 10 percent more Canadians were to use financial advisors. It used detailed survey results produced in 2012 by the Centre for Interuniversity Research and Analysis on Organizations (CIRANO) to estimate the increase in aggregate savings should more individuals obtain financial advice.
"The Conference Board of Canada study emphasizes the positive impact that having an advisor can have on both household income and the economy," De Laurentiis stated. "The findings offer useful insights for public policy makers as they look for ways to create long-term individual financial wealth and economic growth. They underscore the importance of pursuing public policies that actively support and promote access to advice for the average Canadian household."
About the Mutual Funds Industry in Canada:
The first Canadian mutual fund was launched in 1932 with a goal of attracting $50,000 in savings. The real growth surge of mutual funds began in the early 1990s as Canadians saw interest rates on traditional savings accounts fall and began looking for new ways to grow their wealth. Investments in mutual funds have grown tenfold in Canada since 1990 and are a cornerstone of Canadians' retirement savings. Today, they are the #1 investment choice of Canadian savers as some 117 mutual funds companies offer close to 3,000 funds. Current AUM of $1.13 trillion represents about five times the assets being managed for Canadians by the CPP Investment Board ($220 billion as of March 2014) and is higher than the roughly $992 billion in assets held at December 2013 by the top 10 Canadian pension funds (including CPP).
By connecting Canada's savers to Canada's economy, the mutual funds industry contributes significantly to Canadian economic growth and job creation.
The Investment Funds Institute of Canada is the voice of Canada's investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. The organization is proud to have served Canada's mutual funds industry and its investors for more than 50 years.
SOURCE: The Investment Funds Institute of Canada
For further information: Sara Clodman, [email protected], 416-309-2317