2022 IG Wealth Management Financial Confidence Index: Concerns About the Economy Lowers Canadians’ Confidence
- End of year Index stands at 51, down 6 points from 2021
- Canadians aged 35-54 reported the largest decrease in confidence, down 17 per cent from 2021
- British Columbia least financially confident region, down 20 per cent from 2021
- Confidence levels of those who work with a financial advisor 28 per cent higher than those who don’t
WINNIPEG, MB – November 9, 2022 – Volatile markets, inflationary pressures and rising interest rates are having an impact on Canadians’ financial confidence, according to the fifth annual edition of the IG Wealth Management Financial Confidence Index. This is reflected across all demographic groups and regions in Canada. Further, most expect the country to enter a recessionary period early in 2023, fueling concerns.
The Index, commissioned by IG Wealth Management (“IG”) and conducted in partnership with Ipsos Canada, tracks and reports on Canadians’ overall financial confidence through 10 survey questions which ladder to IG’s Four Pillars of Financial Confidence (“the Pillars”): Personal Financial Outlook, Planning and Literacy, Trust in the Economy and Current Financial Situation.
The Index found that Canadians’ overall financial confidence at the end of the year stands at 51, an 11 per cent decrease over the same period in 2021 (57). Other key findings include:
- While Canadians remain relatively confident about the state of their personal financial situation, reflected through results that were largely in line with 2021 Index scores in the Personal Financial Outlook (54 in 2022), Planning and Literacy (56) and Current Financial Situation (52) categories, their outlook for and Trust in the Economy (43) was primarily responsible for the decrease in overall confidence.
- Among all age groups, the confidence of those aged 34-55 (the so-called “sandwich generation”) has dropped the most this year (down 17 per cent from 2021 to 43), reflecting concerns over rising mortgage rates and retirement savings being impacted by market volatility.
- BC experienced the greatest drop in confidence across all regions, with a score of 47, down 20 per cent from 2021 (59). Individuals in the province are particularly distressed about rising interest rates and the cost of living and are the most anxious in Canada about their finances.
- Almost 40 per cent of Canadians believe that professional financial advice is more important than ever given current economic conditions.
- Among the community groups IG is dedicated to helping build financial confidence, Indigenous rose one point (50) versus last year, while Seniors (58) and Newcomers to Canada (60) fell 6 and 4 points respectively.
“People are generally feeling good when it comes to their personal financial situation. However, after a year in which major global events and the lasting effects of the pandemic have roiled financial markets and contributed to decades-high inflation, they are feeling much less confident about the overall economy and where things could be headed in the year ahead,” observed Damon Murchison, President and CEO, IG Wealth Management.
Economic Conditions a Major Contributor to Lowered Confidence
When it comes to the Canadian economy, the study found:
- Most Canadians (55 per cent) believe the country is currently in recession and more than two-thirds (68 per cent) feel that there will be a recession in 2023.
- Almost half (46 per cent) feel the inflation rate will increase in 2023.
- Only one-third (33 per cent) report that financial authorities are responding efficiently to the situation.
Further, as the Bank of Canada takes aim at inflation by raising interest rates, the dream of homeownership is being pushed further out of reach for younger Canadians. More than one-third (36 per cent) of those aged 18-34 reported that they will be postponing their home-ownership goals. However, more Canadians (22 per cent in 2022, versus 12 per cent in 2021) believe that housing prices will become more affordable in the year to come.
The Value of Professional Advice
The study also found that the overall financial confidence of Canadians who work with a financial advisor (59) is significantly higher than among those who do not (48), reflecting the important role professional advice and financial planning can play during times of economic uncertainty.
“Canadians are trying to make sense of what’s happening around them and how it could potentially impact their personal situation, so it makes sense that those who have access to professional advice are feeling more confident,” noted Mr. Murchison. “People who work with an advisor tend to feel more financially confident, and report better outcomes when it comes to their ability to save, and even in their ability to enjoy life because they’re worrying less about their finances.”
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.
About IG Wealth Management
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 $108.3 billion in assets under advisement as of October 31, 2022 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 $245.7 billion in total assets under management and advisement as of October 31, 2022.
About the IG Financial Confidence Index
The 2022 results presented in this summary report are from an Ipsos survey conducted online from September 13th to September 27th, 2022. A total sample of 2,600 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. Since an online sample is not considered probabilistic, Ipsos does not apply a margin of error to this survey. The precision of non-probabilistic Ipsos surveys is measured using a credibility interval. The credibility interval for a survey of 2,600 respondents is ±2.3 percentage points, 19 times out of 20. The credibility interval will be wider among subsets of the population.
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