Description

“Current markets trends are seeing increasing interest in ESG investing, while the current COVID-19 world will witness a rise in thematic investing related to those sectors that will reshape the post-pandemic world.”
– Sanjay Sharma, Senior Financial Services Analyst

This report examines the following areas:

  • The impact of COVID-19 on consumer behaviour related to investments and investment trends in general.
  • It explores product ownership, choice factors behind companies used for investments, interest in thematic investing, improving the investor experience and attitudes towards investing. The results are also analyzed by affluence levels.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definitions
          • New Canadians
            • Regional classifications
              • Income
                • Glossary
                • Executive Summary

                    • The issues
                      • Impact of COVID-19
                        • Figure 1: Short, medium and longer-term impact of COVID-19 on investing trends, June 2020
                      • More than a third own mutual funds and around a quarter own stocks
                        • Figure 2: Product ownership, February 2020
                      • Brand and fees matter most when choosing an investment company
                        • Figure 3: Reasons for choosing an investment company, February 2020
                      • Around half interested in technology and industry-specific themes
                        • Figure 4: Interest in thematic investing, February 2020
                      • Fee transparency on top of investor wish list
                        • Figure 5: Improvements in the investing experience, February 2020
                      • The opportunities
                        • Big banks have a brand and distribution advantage
                          • Affluent more interested in thematic investing
                            • Figure 6: Interest in thematic investing (select), by level of investments, February 2020
                          • Moving towards better fee disclosure and lower costs
                            • Simplifying information materials
                              • What it means
                              • The Impact of COVID-19 on Investment Trends

                                • Summary
                                  • Figure 7: Short, medium and longer term impact of COVID-19 on investing trends, June 2020
                                • Opportunities and Threats
                                  • Offering reassurance
                                    • Figure 8: Vanguard investments, online advertisement, April 2020
                                  • ETF growth outlook remains strong
                                    • Donor-advised funds will continue to grow
                                      • Figure 9: Charitable Impact Instagram post, June 2020
                                    • The crisis will increase the popularity of ESG investing
                                      • Every crisis is an opportunity
                                        •  Figure 10: Fidelity investments mobile advertisement, April 2020
                                      • Market impact of COVID-19
                                        • Discount brokerages thrive as consumers move online
                                            • Figure 11: National bank discount brokerage mobile advertisement, April 2020
                                          • High-yield bonds face COVID-19 fallout
                                            • Moving towards better fee disclosure and lower costs
                                              • How the crisis will affect key consumer segments
                                                • Women are more likely to cut spending drastically
                                                  • Affluent more interested in thematic investing
                                                    • How a COVID-19 recession will impact consumer finances
                                                      • Economic update
                                                        • Figure 12: Canadian GDP, 2018 Q4 – 2020 Q1
                                                      • Unemployment is a huge concern as GDP plummets
                                                        • COVID-19: Canadian context
                                                        • The Market – What You Need to Know

                                                          • Financial market impact of COVID-19
                                                            • Donor-advised funds
                                                              • Socially responsible investing
                                                                • The rise of thematic investing
                                                                  • COVID-19 impact on investment themes
                                                                  • The Market – What’s New?

                                                                    • Financial market impact of COVID-19
                                                                      • Figure 13: Worry about the risk of being exposed to COVID-19, May 11-15, 2020
                                                                    • Socially responsible investing
                                                                      • ESG and COVID-19
                                                                        • The rise of thematic investing
                                                                          • COVID-19 impact on investment themes
                                                                            • Donor-advised funds
                                                                            • Key Players – What You Need to Know

                                                                              • COVID-19 industry developments
                                                                                • High-yield bonds and mutual funds face COVID-19 fallout
                                                                                  • World’s largest asset managers seek overhaul of leveraged ETF sales rules
                                                                                    • New business and product launches
                                                                                      • US investment bank Morgan Stanley launches wealth management business
                                                                                        • RBC exploring building a cryptocurrency trading platform
                                                                                        • Key Players – Industry Developments and Innovations

                                                                                          • RBC exploring building a cryptocurrency trading platform
                                                                                            • Vancity announces Unity Term Deposit for COVID-19
                                                                                              • Hub Financial partners with Nest Wealth
                                                                                                • Mutual funds face flood of redemptions, some real estate funds halt redemptions
                                                                                                  • High-yield bonds face COVID-19 fallout
                                                                                                    • US investment bank Morgan Stanley launches wealth management business in Canada
                                                                                                      • Equitable Bank launches new USD HISA
                                                                                                        • Investor advocates seek overhaul of leveraged ETF sales rules
                                                                                                        • Key Players – Marketing Campaigns & Launches

                                                                                                          • Scotiabank, Tangerine team up with MLSE to feed healthcare workers, shelters
                                                                                                            • BMO thanks frontline workers
                                                                                                              • Figure 14: BMO | Thank you, April 2020
                                                                                                            • Tangerine goes with a positive post-COVID message
                                                                                                              • Figure 15: Tangerine’s Again, April 2020
                                                                                                            • Vexxit matches advisors to clients
                                                                                                              • Citi (US) unveils digital investment platform “Citi Wealth Builder”
                                                                                                                • Skimm’n in the Money (US)
                                                                                                                • The Consumer – What You Need to Know

                                                                                                                  • More than a third own mutual funds and around a quarter own stocks
                                                                                                                    • Brand and fees matter most when choosing an investment company
                                                                                                                      • Fee transparency top of investor wish list
                                                                                                                        • Around half interested in technology and industry-specific themes
                                                                                                                          • Robo-advisors and cryptocurrencies appeal more to younger investors
                                                                                                                            • Affluent are more engaged investors
                                                                                                                            • Product Ownership

                                                                                                                              • More than a third own mutual funds and around a quarter own stocks
                                                                                                                                • Figure 16: Product ownership, February 2020
                                                                                                                              • Age and gender influence ownership
                                                                                                                                • Encouraging younger investors to invest
                                                                                                                                  • Figure 17: Product ownership (select), 18-44s vs over-45s, February 2020
                                                                                                                                  • Figure 18: Product ownership (select), by gender, February 2020
                                                                                                                                • Chinese Canadians have a higher ownership of some products
                                                                                                                                  • Figure 19: Product ownership (select), Chinese Canadians* vs overall, February 2020
                                                                                                                                • Using branches to sell investments to new Canadians
                                                                                                                                  • Figure 20: Product ownership (select), new Canadians* vs overall, February 2020
                                                                                                                                • Around half of affluent own stocks directly
                                                                                                                                    • Figure 21: Product ownership, by level of investments, February 2020
                                                                                                                                  • Millionaires set themselves apart
                                                                                                                                    • Figure 22: Product ownership (select), millionaires vs those with between $500K and $1 million in investments, February 2020
                                                                                                                                • Choosing an Investment Company

                                                                                                                                  • Brand and fees matter most
                                                                                                                                    • Figure 23: Reasons for choosing an investment company, February 2020
                                                                                                                                  • Big banks have a brand and distribution advantage
                                                                                                                                    • Older investors are more likely to be influenced by financial advisor
                                                                                                                                      • Figure 24: Reasons for choosing an investment company (select), 18-44s vs over-45s, February 2020
                                                                                                                                    • Affluent investors are more demanding
                                                                                                                                      • Figure 25: Reasons for choosing an investment company (select), by level of investments, February 2020
                                                                                                                                    • Men are also demanding
                                                                                                                                      • Figure 26: Reasons for choosing an investment company (select), by gender, February 2020
                                                                                                                                  • Interest in Investing Themes

                                                                                                                                    • The rise of thematic investing
                                                                                                                                      • Around half interested in technology and industry-specific themes
                                                                                                                                        • Figure 27: Interest in thematic investing, February 2020
                                                                                                                                      • Affluent more interested in thematic investing
                                                                                                                                        • Figure 28: Interest in thematic investing (select), by level of investments, February 2020
                                                                                                                                        • Figure 29: Interest in thematic investing (select), 18-44s vs over-45s, February 2020
                                                                                                                                      • Women more interested in ESG, men in other themes
                                                                                                                                        • Figure 30: Interest in thematic investing, by gender, February 2020
                                                                                                                                      • Considerable interest in ESG investing
                                                                                                                                      • Improving the Investing Experience

                                                                                                                                        • Fee transparency tops investor wish list
                                                                                                                                          • Figure 31: Improvements in the investing experience, February 2020
                                                                                                                                        • Moving towards better fee disclosure and lower costs
                                                                                                                                          • High Canadian mutual fund fees remain an issue but robo-advisors are not capitalizing
                                                                                                                                            • Wish lists differ by age
                                                                                                                                              • Figure 32: Improvements in the investing experience (select), 18-44s vs over-45s, February 2020
                                                                                                                                            • Some gender differences also emerge
                                                                                                                                              • Figure 33: Improvements in the investing experience (select), by gender, February 2020
                                                                                                                                          • Attitudes towards Investment Trends

                                                                                                                                            • Robo-advisors
                                                                                                                                              • Figure 34: Attitudes towards robo-advisors, February 2020
                                                                                                                                              • Figure 35: Attitudes towards robo-advisors, by age and gender, February 2020
                                                                                                                                            • Cryptocurrencies appeal more to men and younger investors
                                                                                                                                                • Figure 36: Attitudes towards cryptocurrency, overall vs age and gender, February 2020
                                                                                                                                            • Attitudes towards Investing

                                                                                                                                              • Two in three prefer funds offered by big banks
                                                                                                                                                • Figure 37: Attitudes towards investing, February 2020
                                                                                                                                              • Most investors agree that exchange-traded funds are here to stay
                                                                                                                                                • ETF growth outlook remains strong
                                                                                                                                                  • Figure 38: Attitudes towards investing (select), by level of investments, February 2020
                                                                                                                                                • More than half hold different types of investments by account type
                                                                                                                                                  • Many investors are passionate about investing
                                                                                                                                                      • Figure 39: Attitudes towards money, February 2020
                                                                                                                                                      • Figure 40: Attitudes towards money (select), by gender, February 2020
                                                                                                                                                    • Older consumers are less likely to prefer keeping large amounts in savings accounts
                                                                                                                                                      • Figure 41: Attitudes towards money (select), 18-44s vs over-45s, February 2020
                                                                                                                                                    • Affluent are more engaged investors
                                                                                                                                                      • Figure 42: Attitudes towards money (select), by level of investments, February 2020
                                                                                                                                                    • Money begets money
                                                                                                                                                      • Figure 43: Attitudes towards investing (select), millionaires vs those with between $500K and $1 million in investments, February 2020
                                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                                    • Data sources
                                                                                                                                                      • Consumer survey data
                                                                                                                                                        • Consumer qualitative research
                                                                                                                                                          • Abbreviations and terms

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