Two-thirds of Canadian Investors are Interested in Starting or Building their Portfolio of Responsible Investment
Toronto, ON, January 15, 2020 — Two thirds (63%) of Canadian investors indicate an interest in starting or building their portfolio of socially responsible investments, however, nearly half (48%) do not know where to find trustworthy information about responsible investing, according to a recent survey conducted by Ipsos on behalf of RBC Global Asset Management Inc. Not only are most investors interested in responsible investment but also three-quarters (73%) of respondents agree that socially responsible investing is the way of the future. However, the lack of awareness on where to find reliable information is likely contributing to a gap in knowledge and potentially hindering greater allocation of funds to responsible investment.
Role of financial advisors in building knowledge
In order to find out more about socially responsible investing, nearly two thirds (61%) would rely on consulting a financial advisor. In fact, three-quarters (76%) of investors find it important for the financial advisor they work with to have expertise and offers or products in responsible investment. Nearly half (48%) of investors indicate that in the next year, they are likely to have a conversation with their financial advisors about responsible investment.
A third of investors have a discussed responsible investing with their financial advisor and among those who have had such a discussion, 9 in 10 (89%) were recommended responsible investments by their advisor.
Younger investors aged 18-34 are more likely to have ever discussed responsible investments with a financial advisor (45% vs 35-54 32%, 55+27%). Residents of British Columbia (46%) and Quebec (38%) were also more likely to indicate they had engaged in such conversation with their advisors compared to Ontario (27%) or Atlantic (19%) residents.
Perception of performance trade off not a concern
Eight in 10 (81%) investors believe that responsible investing offers either a better (19%) or similar (62%) rate of return compared to traditional investing. Younger investors aged 18-34 are more likely to believe that responsible investing offers a better return (30% vs. 35-54 17%, 55+ 13%).
Expected growth of investors’ responsible investment portfolio
Despite the interest in starting or building responsible investments shown by two thirds of investors (63%), less than a third (30%) expect responsible investment to make up a larger share of their portfolio going forward, five years from now. Therefore, interest is not yet translating into predicted growth of responsible investment portfolios in the immediate future. However, younger investors aged 18-34 (40% vs. 35-54 31%, 55+ 22%), are more likely to expect greater allocation of their funds to responsible investments in the future.
Knowledge gap posing as hindrance
Among all investors, nearly 4 in 10 (37%) indicate they are not interested in responsible investment. When asked for a reason for their lack of interest, 31% of uninterested investors indicate that they do not know enough about it to be interested. Women (42% vs men 22%) and younger investors under the age of 55 (18-54 38% vs. 55+ 21%) are more likely to indicate this as a reason for their lack of interest despite overall displaying higher interest in building responsible investment portfolios.
Importance of investing in socially responsible companies
Nine in 10 investors (86%) find it very (33%) or somewhat (53%) important that the companies they invest in act in a responsible manner. It is more likely to be very important to women (39% vs. men 36%) and younger investors aged 18-34 (42% vs. 35+ 29%), and residents of British Columbia (40% vs. Alberta and Quebec 27%).
Environmental causes matter the most in responsible investing
When asked which aspect of socially responsible investing matters most to them, environmental causes such as such as climate change, water, air, animals, trees etc. came out on top for nearly half (45%) of investors. Another third (32%) ranked social causes such as health and safety, human rights, communities etc. as the most important aspect while only 1 in 10 (10%) ranked governance issues such as board diversity, CEO compensation, gender equity etc. to be the most important aspect of socially responsible investing.
About the Study
These are some of the findings of an Ipsos poll conducted between August 13th and August 23rd, 2019, on behalf of on behalf of RBC Global Asset Management. For this survey, a sample of 1500 Canadian retail investors aged 18+, who were either currently investing, or considering investing over the next two years, was interviewed online The findings were then weighted by age, gender, region, as well as asset level according to Ipsos CFM Asset data to ensure that the findings reflected the actual asset distribution of Canadians. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ± 2.9 percentage points, 19 times out of 20, had all current and potential Canadian retail investors aged 18+ been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
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