Canadians Settling Into Stability But Remain Concerned About the Future: 2024 IG Wealth Management Financial Confidence Index
- Year-end Index stands at 50, same as 2023 and one point below 2022
- Canadians’ trust in the economy on shaky ground with majority fearing a recession in 2025
- Western provinces’ average financial confidence ahead of their Eastern neighbours, with B.C. leading the way
- Financial confidence of those who work with an advisor 15 points higher than those who do not
Winnipeg, MB (Nov. 21, 2024) – According to the seventh annual edition of the IG Wealth Management Financial Confidence Index), 2024 has brought financial stability to Canadians after years of volatility. However, the Index also revealed that many are concerned about what 2025 could have in store for them and showed a clear regional divide in Canadians’ financial confidence.
The Index, commissioned by IG Wealth Management (IG) and conducted in partnership with Ipsos Canada, tracks and reports on Canadians’ overall financial confidence based on 10 survey questions relating to IG’s Four Pillars of Financial Confidence:
- Current Personal Financial Situation,
- Personal Financial Outlook,
- Planning and Literacy, and
- Trust in the Economy.
This year’s Index revealed stabilization, with the Index landing at 50, mirroring 2023 and one point down from 2022. Interestingly, prior to this period the Index score was at a high of 57 in 2021, which can be attributed to several factors including an economic recovery from the initial impacts of COVID-19 and low interest rates.
Canadians’ Unease About the Future Dragging Index Score Down
While three of the Pillars remained relatively consistent this year, Canadians’ Trust in the Economy (40) was the weakest by far, trailing the others by as much as 10 points or more. Factors contributing to this relatively low score included:
- Concerns about a recession: While many Canadians remain wary of a recession, confidence is improving as fewer (54 per cent) anticipate one compared to at the same time last year (68 per cent).
- Job insecurity: Canadians face insecurities related to job stability, with more than one-third (38 per cent) believing the job market will worsen in 2025.
- Anxiety about political climate and global issues: Half of Canadians expect the political situation and economy of Canada and the U.S. to deteriorate in 2025.
“While the Index has stabilized since the pandemic, there’s still a clear sense of anxiety among Canadians as we head into 2025,” said Damon Murchison, President & CEO, IG Wealth Management. “This isn’t surprising – over the last year, Canadians have had to deal with political uncertainty, a higher interest rate environment, a rising cost of living and spiraling housing costs.”
Financial Confidence: A Tale of Two Canadas
The latest Index reveals a regional divide in Canadians’ financial confidence, with the average confidence level of the four Western provinces ahead of their Eastern counterparts. B.C. outpaced all provinces with a high score of 55, while Quebecers’ confidence (49) dropped by a significant four points from 2023.
These results may, in part, be attributed to the proactive approach of British Columbians, as more than half (51 per cent) report using financial advice – significantly higher than the national average (43 per cent). Political and economic factors, including a disproportionate reaction to recent interest rate reductions and wage increases, may also explain this recent surge in optimism. On the other hand, Quebec’s declining confidence calls for greater financial education and guidance with just 49 per cent of Quebecers feeling prepared and on track to meet their financial goals, a steep decline from 62 per cent last year.
Financial Confidence and the Value of Advice
The Index also continues to show a clear trend: Canadians benefit from the value of advice, with those who currently work with a financial advisor having a significantly higher level of financial confidence (59) than those who do not (44).
“Given the growing complexity of the world around us, the speed at which things are changing and the volatility of the last few years, it’s not a surprise that people who work with an advisor feel better about their situation,” observed Mr. Murchison. “A qualified advisor can put things in perspective, help you see the forest from the trees and create an integrated financial plan that takes all dimensions of your financial world into consideration.”
About the IG Financial Confidence Index
The 2024 results presented in this summary report are from an Ipsos survey conducted online from September 20th to October 1st, 2024. A total sample of 2,001 respondents from across Canada participated in the survey. Weighting was applied to the total sample by age, gender, region and education level to ensure that the composition of the final sample is representative of Canada’s adult population according to the latest census data from Statistics Canada. This survey has a credibility interval of +/- 2.2 per cent 19 times out of 20, of what the results would have been had all Canadian adults 18+ been surveyed.
About IG Wealth Management
Founded in 1926, IG Wealth Management (“IG”) is a Canadian leader in delivering financial planning with approximately $136.6 billion in assets under management as of October 31, 2024. For more than 95 years, IG has been focused on improving the financial well-being of Canadians so they can confidently embrace all of life’s possibilities. Through a network of advisors located across the country, IG provides approximately one million clients with personalized advice, comprehensive financial planning, insurance and mortgage services and professionally managed investment solutions. IG is a member of IGM Financial Inc. (TSX: IGM), part of the Power Corporation group of companies and one of Canada’s leading diversified wealth and asset management organizations with approximately $264 billion in total assets under management and advisement as of October 31, 2024. For more information, visit www.iga.ca.
SOURCE: IG Wealth Management via North Strategic Public Relations
Tags: consumer attitudes, coronavirus, outlook / predictions, survey