News Release

IFIC Releases Conference Board of Canada Report on the Impacts of Financial Advice on the Canadian Economy

Findings highlight the broad economic benefits of working with a financial advisor

June 25, 2020 (Toronto) – The Investment Funds Institute of Canada (IFIC) today released the report Saving for the Future: Impacts of Financial Advice on the Canadian Economy, produced by The Conference Board of Canada. The report evaluates the impact of receiving financial advice on individual savings and the resulting positive effects on the Canadian economy.

“This research demonstrates the important long-term benefits of saving money with the guidance of a financial advisor,” said Paul Bourque, President and CEO, IFIC. “The increase in savings not only enables Canadians to more effectively prepare for retirement, it strengthens the broader economy.”

The individual impact analysis in the report is based on a hypothetical comparison of two individual savers – one who has a financial advisor and one who does not.

The report’s economic impact analysis is based on a hypothetical scenario in which 10 per cent of individuals who did not previously use a financial advisor begin a relationship with one and started saving at a higher rate. The Conference Board’s national forecasting model was used to quantify the impacts of the increase in savings over an extended period of time, spanning from 2020 until 2060.

Report highlights:

• By 2060, an increase in savings when 10 per cent more Canadian investors use a financial advisor leads to:
  • An increase of $2.0 billion in household wealth;
  • An increase of $900 million in real GDP; and
  • An increase of $7.0 billion in tax contributions.
• At an individual level, having a financial advisor leads to an increase of 55 to 60 per cent in retirement savings.
• In the same scenario, spending during retirement increases by 23 to 25 per cent.

“Saving for retirement involves making small changes that have a significant impact over time,” said Sheila Rao, Principal Research Associate at The Conference Board of Canada. “While higher savings means less spending in the short term, in the long run we see an increase in consumption, more business investment, and increased output.”

IFIC collaborated with The Conference Board of Canada in August 2019 on the report Assessing the Economic Footprint of the Funds Industry in Canada, which highlights the economic growth of the investment funds industry in Canada and its significant contributions to the Canadian economy.

To view the report, visit IFIC.ca. An infographic is also available on The Conference Board of Canada website.

About IFIC

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. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.

For more information, please contact:

Pira Kumarasamy
Senior Manager, Communications and Public Affairs
pkumarasamy@ific.ca
416-309-2317