866-997-4948(US-Canada Toll Free)

Retirement Planning - Canada - August 2014

Published By :

Mintel

Published Date : Aug 2014

Category :

Banking

No. of Pages : 177 Pages

The financial industry needs to go beyond projecting retirement dollar amounts and offer solutions that include effective decumulation strategies and more customized long-term insurance products that are aligned to government health care coverage.
Table of Content

Introduction

Definition
Excluded
Abbreviations
Glossary
Annuities
Atlantic Provinces
Canada Pension Plan
Decumulation
Defined Contribution Pension Plan (DCPP)
Defined Benefit Pension Plan (DBPP)
Deferred Profit Sharing Plan (DPSP)
Equities
Guaranteed Income Supplement
Housing starts
Locked-In Retirement Account (LIRA)
Non-Registered Investments
Old Age Security
Retirement target-date funds
Reverse Mortgage
Registered Retirement Income Fund (RRIF)
Registered Retirement Savings Plan (RRSP)
Segregated Funds (Seg. Funds)
Tax Free Savings Account (TFSA)
Term Life Insurance
Universal Life Insurance
Whole Life Insurance

Executive Summary

The market
Market factors
Canadian economy to pick up speed, but many risks remain
Population changes signal greater opportunity for retirement planning advice
Financial Strength of Canada’s Pension Plan & Old Age Security
Companies, brands and innovation
The consumer
Almost 80% of non-retired Canadians own a retirement savings product
Figure 1: Ownership of retirement savings products, June 2014
More than a quarter of Canadians fall into the mass affluent category
Banks are the most trusted source for retirement planning advice
Figure 2: Most trusted source of retirement advice, June 2014
Talking to a financial advisor is the most prevalent retirement planning activity
A third of Canadians state that they are comfortable with their debt
Longevity risk at the heart of retirement worry, particularly among women
Figure 3: Attitudes towards retirement planning, June 2014
What we think

Issues in the Market

Countering worry factors through more mass-marketed integrated retirement solutions
The facts
The implications
Boosting trust in banks and credit unions
The facts
The implications
Using simple messaging and investment strategies to boost engagement
The facts
The implications
Winning over the Chinese Canadian consumer
The facts
The implications

Trend Application

Trend: Help Me Help Myself
Trend: Edutainment
Trend: Prepare for the Worst

Market Drivers

Key points
Population count and growth in Canada
Figure 4: Share of population of Canada, by territory/province, 2014
Figure 5: Share of population in different age groups, by territory/province, 2013
Canada’s population is expected to age in the coming years
Figure 6: Population aged 65 years and over in Canada, historical and projected (per cent of total), 1971-2061
Figure 7: Projected trends in the age structure of the Canada population, 2014-19
Canada’s low rates of elderly poverty
Increase in average retirement age
Figure 8: Average retirement age in Canada, all retirees, 2009-13
Overview of Canada’s Retirement Income System
The Three Pillars of Retirement Income
Financial Strength of Canada’s Pension Plan & Old Age Security
Pooled Registered Pension Plan (PRPP)
Proposed Ontario Retirement Pension Plan (ORPP)
Canadian mutual fund fees
Decumulation and longevity risk
Economic overview
IMF says Canadian economy to pick up speed, but many risks remain
Figure 9: Canada’s GDP by quarter, 2008-14
Figure 10: Household disposable incomes and savings in Canada, 2008-14
Unemployment rates remain steady
Figure 11: Canada’s unemployment rate, 2008-14
Interest rates, inflation and market volatility
Figure 12: Inflation rates in Canada, 2004-14
Outlook on the real estate and housing market
Figure 13: Canada median net worth, by province, 2012

Strengths and Weaknesses

Strengths
Weaknesses

Who’s Innovating?

Key point
National Bank’s Investment Track Retirement Planning App for iPad
Sun Life’s Brighter Life website
Desjardins
CI Investments
RBC Retirement Research Centre

Market Size and Forecast

Key points
Canada Pension Plan (CPP)
Employer-sponsored pension plans
Figure 14: Registered ownership plans in Canada, 2011-12
RRSP
TFSA
Segregated (Seg.) Funds

Companies and Products

Bank of Montreal (BMO)
Overview and company information
Recent activity and innovation
Sun Life
Overview and company information
Recent activity and innovation
Fidelity Investments Canada
Overview and company information
Recent activity and innovation
Dundee Goodman Private Wealth
Overview and company information
Recent activity and innovation
Desjardins
Overview and company information
Recent activity and innovation
CI Financial
Overview and company information
Recent activity and innovation
Tangerine Bank (formerly ING Direct)
Overview and company information
Recent activity and innovation

Brand Communication and Promotion

Key points
ING (Tangerine) emerges as the most active direct mailer
Figure 15: Direct mail acquisition volume (‘000) related to investments (August 2013-May 2014)
Featured Campaigns from Mintel Comperemedia
President’s Choice (PC) Financial
ING Direct/(Tangerine Streetwise Portfolios)
Insured Annuity from Scotia McLeod

The Consumer – Ownership of Retirement Savings Accounts

Key points
Almost 80% of non-retired Canadians own a retirement savings product
Figure 16: Ownership of retirement savings products, June 2014
Product ownership peaks among over-55s
Figure 17: Ownership of retirement savings products, by age, June 2014
Lower ownership rates in the Atlantic Provinces
Figure 18: Ownership of retirement savings products by region, June 2014
Repertoire analysis
Figure 19: Repertoire analysis, June 2014

The Consumer – Amount of Retirement Savings

Key points
More than a quarter of Canadians fall into the mass affluent category
Figure 20: Amount of retirement savings, June 2014
Men are more likely to invest higher amounts for retirement savings
Figure 21: Amount of retirement savings, by gender, June 2014

The Consumer – Trust in Retirement Planning Advice

Key points
Banks are the most trusted source for retirement planning advice
Figure 22: Most trusted source of retirement advice, June 2014
Trust in banks declines with age
Figure 23: Most trusted source of retirement planning advice, by age, June 2014
High-income earners prefer independent financial advice
Figure 24: Most trusted sources of financial advice, by income, June 2014
Credit unions and retirement planning

The Consumer – Retirement Planning Activities

Key points
Talking to a financial advisor is the most prevalent planning activity
Figure 25: Retirement planning activities performed, June 2014
Older Canadians are the most likely planners
More than a third of affluent Canadians have conducted estate planning
Figure 26: Retirement planning activities, by amount of investments, June 2014

The Consumer – Attitudes towards Money

Key points
A third of Canadians state that they are comfortable with their debt
Figure 27: Attitudes towards money, June 2014
Women are more risk-averse than men
Figure 28: Attitudes towards money, by gender, June 2014

The Consumer – Attitudes towards Retirement Planning

Key points
Summary of attitudes towards retirement planning
Figure 29: Attitudes towards retirement planning, June 2014
Longevity risk at the heart of retirement worry particularly among women
Figure 30: Worry-related attitudes towards retirement, June 2014
Only two in five Canadians feel they will be financially secure when they retire
Figure 31: Planning-related attitudes towards retirement, June 2014
Women are more likely than men to be overwhelmed by retirement investing
Figure 32: Retirement investing perspectives, by gender, July 2014
Widespread difficulties in saving for retirement
Figure 33: Attitudes towards the difficulties of retirement planning, June 2014
Young males most likely to procrastinate on saving for retirement
Figure 34: Procrastination-related attitudes towards retirement, June 2014

The Consumer – Retirement Planning and Chinese Canadians

Key points
Significantly high ownership rates of TFSAs among Chinese Canadians
Figure 35: Ownership of retirement accounts: Chinese Canadians against White/Caucasians, June 2014
Chinese Canadians are more likely to rate banks as their most trusted source for retirement planning advice
Figure 36: Most trusted source of retirement planning advice: Chinese Canadians against White/Caucasians, June 2014
Chinese Canadians report a stronger investment knowledge
Figure 37: Attitudes towards money: Chinese Canadians against White/Caucasians, June 2014
Figure 38: Attitudes towards retirement planning: Chinese Canadians against White/Caucasians, June 2014

The Consumer – Target Groups

Key points
Three target groups
Figure 39: Target groups, June 2014
Group 1: Avoiders (45%)
Group 2: Planners (27%)
Group 3: Worriers (28%)

Appendix – The Consumer – Ownership of Retirement Savings Accounts

Figure 40: Ownership of retirement savings accounts, June 2014
Figure 41: Ownership of retirement savings accounts, by demographics, June 2014
Figure 42: Ownership of retirement savings accounts (continued), by demographics, June 2014
Repertoire analysis
Figure 43: Repertoire of ownership of retirement savings accounts, June 2014
Figure 44: Repertoire of ownership of retirement savings accounts, by demographics, June 2014

Appendix – The Consumer – Amount of Retirement Savings

Figure 45: Value of retirement savings, June 2014
Figure 46: Value of retirement savings, by demographics, June 2014
Figure 47: Value of retirement savings (continued), by demographics, June 2014
Figure 48: Value of retirement savings, by product ownership, June 2014

Appendix – The Consumer – Trust in Retirement Planning Advice

Figure 49: Most trusted source of retirement advice, June 2014
Figure 50: Most trusted source of retirement advice, by demographics, June 2014

Appendix – The Consumer – Retirement Planning Activities

Figure 51: Retirement planning activities performed, June 2014
Figure 52: Most popular retirement planning activities performed, by demographics, June 2014
Figure 53: Next most popular retirement planning activities performed, by demographics, June 2014
Figure 54: Other retirement planning activities performed, by demographics, June 2014

Appendix – The Consumer – Attitudes towards Money

Figure 55: Attitudes towards money, June 2014
Figure 56: Attitudes towards money, by demographics, June 2014
Figure 57: Attitudes towards money (continued), by demographics, June 2014
Figure 58: Attitudes towards money (continued), by demographics, June 2014

Appendix – The Consumer – Attitudes towards Retirement Planning

Figure 59: Attitudes towards retirement, June 2014
Figure 60: Agreement with the statements ‘I worry that government old age security will not be available when I retire’ and ‘It is important to know at what age you plan to retire’, by demographics, June 2014
Figure 61: Agreement with the statements ‘I am worried about how I will live when I get older’ and ‘I am worried about paying for healthcare costs as I get older’ and, by demographics, June 2014
Figure 62: Agreement with the statements ‘I find it hard to save for retirement’ and ‘Thinking about saving for retirement is overwhelming’, by demographics, June 2014
Figure 63: Agreement with the statements ‘I feel that I am on track to retire at age 65 or before’ and ‘I feel that I will be financially secure when I retire’, by demographics, June 2014
Figure 64: Agreement with the statements ‘I think information about retirement investing is interesting’ and ‘I worry that I have to rely on my family to take care of me when I retire’. by demographics, June 2014
Figure 65: Agreement with the statements ‘I would rather use my money for other things than saving for retirement’ and ‘Retirement is so far off, I don\'t need to think about it’, by demographics, June 2014

Appendix – The Consumer – Retirement Planning and Chinese Canadians

Figure 66: Selected demographics, by total population against Chinese Canadians, June 2014

Appendix – The Consumer – Target Groups

Figure 67: target groups, by demographics, June 2014
Figure 68: Ownership of retirement savings accounts, by target groups, June 2014
Figure 69: Value of retirement savings, by target groups, June 2014
Figure 70: Most trusted source of retirement advice, by target groups, June 2014
Figure 71: Retirement planning activities performed, by target groups, June 2014
Figure 72: Attitudes towards retirement, by target groups, June 2014
Figure 73: Attitudes towards financial planning, by target groups, June 2014

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company *
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *

Upcoming Reports

  • Sugar and Gum Confectionery - UK - January 2015

    Rising dental health concerns can create an opportunity for chewing gum brands. Currently much of the marketing for sugar-free gums centres around fresh breath, however, the dental health benefits, particularly for children, could warrant more focus. Though explored internationally, tooth-friendly gums tailored for children remain rare in the UK market....