Scope and Themes

• What you need to know
• Data sources
• Consumer survey data
• Abbreviations and terms
• Abbreviations
• Companies mentioned in this report

Executive Summary

• Industry overview
• The consumer: financial and investment decision-making
• Credit cards, mobile phones, and payment behavior
• Bank communications and financial information
• Marketing strategies and channels
• Who are the innovators?

Insights and Opportunities

• Key points
• Canada’s highest earners could use some debt management advice
• Many Canadians don’t have a financial plan, but might need one
• Alerts service may pave the way for mobile payments

Inspire Insights

• Trend: Edutainment
• What we've seen
• Industry application
• Trend: Guiding Choice
• What we've seen
• Industry application

Market Size

• Key points
• One third of Canadian families earn $100K+
• • Figure 1: Canadian families, by income range, 2005-09
• Ottawa has highest median incomes
• • Figure 2: Median total income of census families by family type and metro area, 2009
• Population of Canada is 34.5 million and growing
  • Figure 3: Population of Canada by province, 2007-11

Competitive Context

• Key points
• The Big Five control more than 80% of the Canadian banking market
  • Figure 4: Market shares of Big Five Canadian banks, by assets, July 31, 2011
  • Figure 5: Net income at Big Five Canadian banks, first three quarters of 2011
• Three big companies dominate life insurance market
  • Figure 6: Large Canadian life insurers, assets and market shares, Q2 2010 vs. Q2 2011
• • Figure 7: Net income at big Canadian life insurers, first half 2011
• Financial regulation in Canada constrains competition

Economic Context

• Key points
• Canadian economic growth forecast for 2011-12 scaled back
• IMF sounds warning on Canadian household debt
• Home prices have outpaced household incomes by a wide margin
• • Figure 8: Canadian home prices, June 2005-August 2011

Marketing Channels

• Key points
• Canadian financial planners can benefit from social media
• Calgary firm uses online community to vote on funding projects

Market Drivers

• Key points
• Entrepreneurship drives wealth
• Business equity is largest asset held by wealthiest Canadians.
• Canada’s population growth is being driven by affluent immigrants
• More than one in four expected to be foreign born by 2031
• Immigration to Canada is “sticky”— nearly 80% become citizens
• More than one third of immigrants come from three Asian countries
  • Figure 9: Canada: Permanent residents by source country, 2005-10

Leading Companies

• Key points
• Retail banks
• Royal Bank of Canada
• TD Bank (Toronto-Dominion)
• Bank of Nova Scotia (Scotiabank)
• Bank of Montreal (BMO)
• CIBC (Canadian Imperial Bank of Commerce)
• National Bank Financial Group
• Desjardins Group (Fédération des Caisses Desjardins du Québec)
• President’s Choice Financial (PC)
• Canadian Tire Financial Services
• HSBC Bank Canada
• Card issuers
• Capital One Bank Canada
• American Express
• Insurance companies
• Manulife Financial
• Sun Life Financial
• Great-West Lifeco
• Intact Insurance

Innovation and Innovators

• Key points
• BMO rolls out 'Tap and Go' payment solution for mobile phones
• Manulife offers three-in-one insurance product
• CIBC is first to offer mobile stock trading application
• TD launches no-fee auto rewards credit card
• Capital One adds two new cash-back Aspire cards
• National Bank of Canada initiates Quebec stock index
• Canadian Tire teams with GaggleUp to offer savings, boost rewards
• RBC announces collaboration with Travelocity
• National Bank Securities launches new portfolios aimed at recent retirees
• BMO introduces home ownership app for iPhone and Android devices
• BMO MoneyLogic lets customers track and manage spending and saving
• RBC Wealth Management launches major global branding campaign
• CIBC Wealth Builder Option for mortgages helps grow investments

Marketing Strategies

• Key points
• Overview
• Representative direct mail advertising
• Mutual Fund from President's Choice Financial
  • Figure 10: President’s Choice direct mail ad, August 2011
• Term Life Insurance from Manulife
  • Figure 11: Manulife direct mail ad, September 2011
• Marriott Rewards Platinum Visa Card from Chase
  • Figure 12: Chase Visa direct mail ad, August 2011
• Starwood Preferred Guest Credit Card from American Express
  • Figure 13: Starwood Preferred Guest American Express direct mail ad, August 2011
• Equity Power Mortgage from HSBC
  • Figure 14: HSBC Premier direct mail ad, August 2011
• Home Equity Loans from HSBC Finance Mortgages Inc.
  • Figure 15: HSBC Finance direct mail ad, August 2011
• The Search for Yield Seminar from TD Bank Financial Group
  • Figure 16: TD Bank direct mail ad, May 2011
• Insurance Quote from RBC
  • Figure 17: RBC direct mail ad, August 2011
• Home and Car Insurance from RBC
  • Figure 18: RBC Insurance direct mail ad, August 2011
• Tax-Free Investment Savings Account from ING
  • Figure 19: ING Direct direct mail ad, January 2011

The Consumer—Who Makes Financial Decisions?

• Key points
• Just 5% rely on financial advisors
• • Figure 20: Primary investment decision maker, by gender, September 2011
• Youngest respondents most likely to go it alone
  • Figure 21: Primary investment decision maker, by age, September 2011
• Little differences among income groups
  • Figure 22: Primary investment decision maker by household income, September 2011

Who Pays the Bills in the Household?

• Key points
• Paying bills is a one-(wo)man job
  • Figure 23: Person primarily responsible for everyday financial tasks, by gender, September 2011
  • Figure 24: Person primarily responsible for everyday financial tasks, by age, September 2011
• • Figure 25: Person primarily responsible for everyday financial tasks by household income, September 2011
• Nine out of 10 pay bills online, mostly at bank’s website
  • Figure 26: Method for paying bills, by gender, September 2011
• Nearly 80% of the oldest group pay bills online
  • Figure 27: Method for paying bills, by age, September 2011
• Highest earners more likely to pay bills online
  • Figure 28: Method for paying bills, by household income, September 2011

Most are Confident about Saving for Retirement

• Key points
• Two thirds of the affluent are on track for funding retirement
  • Figure 29: Attitudes about household financial situation, by gender, September 2011
• Oldest respondents are most confident about retirement
  • Figure 30: Attitudes about household financial situation, by age, September 2011
• Highest earners are most worried about their debt burdens
  • Figure 31: Attitudes about household financial situation, by household income, September 2011
• Easterners more confident about life insurance coverage
  • Figure 32: Attitudes about household financial situation, by province, September 2011

Preferred Marketing Channels

• Key points
• Most affluent Canadians rely on professional’s advice when buying financial products
• • Figure 33: Attitudes about insurance and advertising by gender, September 2011
• Older people more likely to rely on professionals
  • Figure 34: Attitudes about financial products and advertising, by age, September 2011
• Highest earners tend to be do-it-yourselfers
  • Figure 35: Attitudes about financial products and advertising, by household income, September 2011
• Responses vary by geography
  • Figure 36: Attitudes about financial products and advertising, by province, September 2011

Miles Trump Cashback for Credit Card Rewards

• Key points
• Well-off Canadians love their credit card miles
  • Figure 37: Attitudes about credit cards, by gender, September 2011
• Youngest group is least fond of annual fees
  • Figure 38: Attitudes about credit cards, by age, September 2011
• Highest earners less likely to pay credit card bills in full
  • Figure 39: Attitudes about credit cards, by household income, September 2011

Most are Worried about Mobile Payment Security

• Key points
• Nearly half of affluent consumers say they would not use mobile phones for payment
  • Figure 40: Attitudes about mobile payments, by gender, September 2011
• Youngest group is most open to mobile payments
  • Figure 41: Attitudes about mobile payments, by age, September 2011
• Highest earners more willing to go mobile
  • Figure 42: Attitudes about mobile payments, by household income, September 2011

Bank Communications Could be Improved

• Key points
• Consumers want more—and better—information
  • Figure 43: Attitudes about financial communications, by gender, September 2011
• Youngest group is most critical about bank communications
  • Figure 44: Attitudes about financial communications, by age, September 2011
• No significant difference across regions
  • Figure 45: Attitudes about financial communications, by province, September 2011

Newspapers are Main Source of Financial Information

• Key points
• Media, financial advisors are main sources of information
  • Figure 46: Information sources for financial decisions, by gender, September 2011
• Youngest group goes online for financial news
  • Figure 47: Information sources for financial decisions, by age, September 2011
• Highest earners are more self-reliant when it comes to information
  • Figure 48: Information sources for financial decisions, by household income, September 2011

Appendix—Trade Associations and Agencies