Understanding Client Perspectives: The Smart Investment in an Uncertain Economy

How is the current feeling of economic uncertainty affecting your customers? Do different segments relate differently to the changes? Ipsos Reid's Market Now! Report recently found marked differences between groups and how they relate to the current volatility in the marketplace. Gender, age, and socio-economic status greatly change the way customers perceive, react to, and approach the current state of economic uncertainty.

In turbulent economic times it is vital that you stay close to your customers and clients with credible and relevant messaging. That messaging needs to accurately reflect their anxieties and worries, address their anger and frustration, and complement their level of engagement, optimism or pessimism. You can't afford to "guess" what your customers are thinking, or base assumptions on past expectations or outdated information that does not reflect or gage current opinions.

Ipsos Reid's Market Now! surveys an online panel of 1,000 representative Canadian adults. Panelists lend their viewpoints to a series of timely financial topics. The survey runs monthly, and covers topics such as: trust in financial institutions, confidence in the banking system, changes in investment mix, shifts to guaranteed investments, and trust for financial advisors to help cope with the current turmoil in the financial markets.

The Market Now! Report for the period between Dec 10th and 18th, 2008 shows striking differences between various segments and groups, such as males and females, those close to retirement, and those of affluence. To illustrate this, consider the differences noted in levels of optimism between females and males when considering current economic conditions and financial outlooks. The female perspective toward financial matters is quite different from the male perspective. The research shows that women have a relatively more cautious, or pessimistic approach to investments associated with greater degrees of risk.

Attitudes of women and men towards their finances:

• 20% of males strongly agree that the stock market is a good place to invest their money, vs. only 6% of females
• 21% of males strongly agree that current economic conditions have created an investment buying opportunity, vs. 11% of females
• 35% of males strongly agree that "a year from now I will be better off financially than I am today," vs. 25% of females

Of note, women's perspectives and their influence as financial service clientele is often overlooked by financial institutions. These financial institutions should raise their efforts and understanding of their female clients in order to better serve them.

When looking cross-spectrum at aging populations vs. younger, it is natural that those closest to retirement view their current financial situation and expectations differently than those who are younger. Data show that the nearly retired group (aged 50-64) is more likely to act on their concerns about the economy and their investments--including spending less now, and working in collaboration with a financial advisor to create an appropriate action plan.

Among those who are nearly retired:

• 46% strongly agree that "I am spending less because I am concerned about the economy", vs. the average of 36%
• 21% strongly agree that "More than ever, I need to work with a professional financial advisor on a financial plan for the future", vs. the average of 15%

Lastly, how have the affluent been affected by the current financial instability? Has their confidence been shaken by current trends and events, or are they more positive about the ability to rebound from adverse affects?

Data show that the affluent group, with investable assets of $100,000 or more, expresses high confidence in the financial institutions that they deal with. Compared with the non-affluent group, they are more proactive in managing their finances by shifting their investment mix and remaining hopeful for potential investment opportunities.

Among the affluent:

• 58% strongly agree that " I am confident that the financial institutions I deal with have the financial strength to survive in the current financial climate" vs. the non-affluent group of 47%.
• 27% strongly agree that "I have changed my investment mix by putting more into guaranteed investments like savings accounts, money market, or GICs, and less into investments like stocks and equity mutual funds" vs. the non-affluent group of 11%
• 25% strongly agree that "More than ever, I need to work with a professional financial advisor on a financial plan for the future" vs. the non-affluent group of 13%.
• 24% strongly agree that "I think that the stock market is a good place to invest my money right now" vs. the non-affluent group of 10%.
• 23% strongly agree that "Current economic conditions have created an investment buying opportunity that I am planning to take advantage of" vs. the non-affluent group of 13%.

In periods of rapid change, time is of the essence. And good communication is essential to maintain a positive and healthy relationship with your customers and clients. The Market Now! Report will provide the information you need to ensure that your organization's messaging remains current and relevant to your key stakeholders.

For information about Ipsos Reid's Market Now! Report, please contact Noel Nowicki, [email protected], or at 416.324.2303.

About Market Now! Report

The Market Now! Report shows the findings of an Ipsos Reid poll conducted in a two-week period each wave. This online survey of (n=1,000) individuals is conducted via Opinions Forum, Ipsos Reid's national online panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted, probability sample of this size, with 100% response rate would have an estimated margin of error of +/-3 percentage points, 19 times out of 20."