Wealthy Paupers: Canada's Affluent Top 20% Don't Feel Rich

Toronto, ONTARIO - Canada's wealthy don't think they're wealthy and they don't believe they have exceptional investment knowledge either, according to an RBC Investments/Ipsos-Reid wealth management poll that sought to discover how the affluent view wealth and their finances.

According to the Poll, the wealthiest 20 per cent of the Canadian population (households):

• Don't consider themselves to be wealthy (95 per cent);
• Think of themselves as having average or little financial knowledge (57 per cent);
• Seek professional advice when making personal investment decisions (81 per cent);
• Are likely to have written financial plans (46 per cent); and
• Have insurance (88 per cent in total, of the 88 per cent, 68 per cent have disability /loss of income).

The survey participants among affluent Canadian households are more likely to be male (56 per cent) and to be between 35 and 54 years old (53 per cent). Of those with $1 million or more (four per cent of Canadians), 79 per cent are male and 58 per cent are over 55.

The poll shows the average affluent Canadian as unassuming about his or her financial status. Only five percent of the full group and 26 per cent of the millionaires consider themselves as wealthy. Overall, 85 per cent think of themselves as simply comfortable. As for financial goals, 86 per cent identify saving for a comfortable retirement is their most important financial objective.

The RBC Investments/Ipsos-Reid survey reveals affluent Canadians admit they have an average knowledge of investments or ability to handle their own finances (48 per cent). An overwhelming 81 per cent seek professional advice about their investments, and the more money they have, the more likely they are to seek advice from a full service investment advisor/broker (56 per cent for those with $1M+ versus 31 per cent for people with assets between $100K and $250K). Six in ten (64 per cent) say they rely heavily on the advice they receive from their professional advisors and only five per cent make financial decisions entirely on their own.

Based on the survey results, Canada's wealthiest citizens appear to be hungry for more information about their finances. Thirty-four per cent access their investment accounts online and 33 per cent use the Internet to research investments.

As for the investing preferences of affluent Canadians, a remarkable 85 per cent hold mutual funds, while 51 per cent list mutual funds as the top investment in their portfolios. Individually held stocks are the top investment for 17 per cent of wealthy Canadians. However, the number is significantly higher, at 37 per cent, for people with $1 million in assets.

When it comes to planning for the future, 46 per cent of Canada's most affluent individuals have formal written financial plans, 79 per cent of which were developed with the assistance of a financial advisor. In light of recent market volatility, 86 per cent of affluent Canadians have reviewed their investments and 59 per cent of them have adjusted their investment mix accordingly.

These findings are from an Ipsos-Reid/RBC Investments poll conducted between February 7 and February 24, 2002. The poll is based on telephone interviews with 1,000 Canadians 18 years of age or older with more than $100,000 in household financial assets excluding principle residence, property, jewellery, or art work. With a sample of this size, the results are considered accurate to within 177 3.1 percentage points, 19 times out of 20. The margin of error will be larger within regions and for other sub-groupings of the survey population. The data was statistically weighted to reflect affluent population with weights taken from the Ipsos-Reid Affluent Canadians Study.

To view the complete factum and slides, please download the attached PDF files.

-30-

For more information on this news release, please contact:

Harriet Shenken
Vice-President
Ipsos-Reid
(416) 324-2900