The pandemic’s impact on the individual investor

Research points to continued commitment to saving

Guest column for Investment Executive

By: Paul Bourque, President and CEO, The Investment Funds Institute of Canada

The Covid-19 pandemic continues to affect Canadians in almost all aspects of their lives. In terms of financial markets, investors have experienced the wide swing from initial market turmoil to all-time market highs. In a previous column, I asserted that Canadian investors, as a whole, have stayed the course during challenging times. Recent research suggests this continues to be the case. We now understand that the individual investor remained invested, added to their savings, and became more informed about their investments through the pandemic in 2021.

In our most recent Pollara mutual fund and ETF investor survey, conducted this year, approximately one-third of both mutual fund and ETF investors reported they saved more during the pandemic, and approximately half of each group was not affected in their ability to save. Of those who saved more, 53% of mutual fund investors and two-thirds of ETF investors were planning to put their extra savings into investments.

These results are further reinforced by the recent OSC survey Investors and the Covid-19 Pandemic, which found that, while many investors (45%) stopped saving for at least one of their savings goals, 80% of investors continued saving for at least one goal, like retirement or their children’s education.

The OSC survey also found that those without an advisor or portfolio manager were twice as likely to consider selling during the pandemic. This point underscores the value of advice and how it helps investors stay the course in turbulent markets.

Over the past year, investors became more familiar and comfortable with investment disclosure. In the Pollara survey, mutual fund and ETF investors reported significant increases in satisfaction with annual fee and performance statements. After coming into force five years ago, investors now have satisfaction levels at all-time highs with the CRM2 reporting.

The research found that the pandemic has shifted the advisor-client relationship in the short-term; however, it remains to be seen whether these changes will have any lasting impact. While many investors have interacted with their advisors using video conferencing, they are looking forward to again having in-person meetings. Only about one in 10 investors stated they’d prefer to continue to use video conferencing tools once the pandemic is over.

As the investment funds industry continues to evolve quickly to adapt to these changing times, it is important that investor needs and expectations continue to be met. In one interesting finding, 70% of mutual fund and ETF investors said the events of the past year have made them more likely to consider investments that have a positive impact on the world. The Pollara research found an increase this year in advisors and financial institutions asking investors about their interest in responsible and impact investments.

We are pleased to see that investors continue to place great confidence in investment funds and advisors. We will continue to monitor the impacts of the global pandemic and work with our stakeholders to achieve policy objectives that ultimately help investors achieve positive outcomes.