Key Highlights:

• 73% of Canadians believe responsible investment portfolios are the way of the future
• 81% believe that responsible investment offers the same or better returns than traditional investing
• 61% rely on their financial advisor for information about responsible investment
• 86% believe it is important that companies they invest in act in a socially responsible way

TORONTO, January 15, 2020 – Canadian investors are increasingly looking to build responsible investment portfolios, but they are not sure how to start and are relying on their financial advisors for guidance, according to a recent survey of Canadian retail investors by RBC Global Asset Management Inc. (RBC GAM Inc.).

The RBC GAM survey focused on a broad spectrum of Canadian retail investors to gauge their attitudes and understanding of responsible investment. The survey revealed that 63% of Canadian investors are interested in building responsible investment portfolios, and 73% of respondents believe responsible investment is the way of the future. However, nearly 50% of investors do not know where to find trustworthy information about responsible investment, suggesting an information gap may be holding them back from actually allocating their investment dollars into responsible investment solutions. To overcome this information gap, 61% of respondents would turn to their financial advisor to learn more about responsible investment, demonstrating how vital of a role financial advisors can play in investor education.

“Canadian financial advisors have earned the loyalty of their clients by providing advice and guidance to help them meet their financial goals,” said Doug Coulter, President of RBC Global Asset Management Inc. “Responsible investment is clearly of great interest to Canadian investors. It represents another opportunity for advisors to work with their clients to provide information and recommendations to help investors turn their interest into action.”  

Financial advisors play a crucial role in responsible investment

Canadian investors view their financial advisors as the most trusted source to learn more about responsible investment. The RBC GAM. survey found that 76% of respondents said it was important for their advisor to have expertise in responsible investment, and to offer responsible investment solutions. Moreover, 48% of respondents said they are likely to have a conversation with their advisors focused on responsible investment within the next year.

“When it comes to responsible investment, Canadians have a clear interest and desire to learn more,” said Melanie Adams, Vice President and Head of Corporate Governance and Responsible Investment at RBC GAM Inc. “There is a role for asset managers, industry associations, advisors and regulators to help increase education around responsible investment, with the ultimate goal of enabling Canadians to make informed decisions.”

Other key findings:                               

A performance trade-off is not a worry for investors: 81% of respondents believe that responsible investment offers the same (62%) or better returns (19%) than traditional investments. When segmented, 30% of younger investors (aged 18-34) believe that returns from responsible investment are superior to those earned in traditional investments.

Responsible investment is expected to grow: Despite 63% of investors being interested in building responsible investment portfolios, only 30% of respondents expect responsible investment to make up a larger part of their investment portfolio within the next five years. This may point to the information gap investors are experiencing, and uncertainty about how to turn an interest in responsible investing into action. When analyzed by demographics, 40% of younger investors (aged 18-34) are likely to allocate a larger portion of their portfolio to responsible investment over the next five years, and are more likely to do so than older investors (35+).

Conversations equal action: When clients discuss responsible investment with their financial advisor, a recommendation of responsible investments was received by 89% of these respondents. When asked if they have engaged in a conversation around responsible investment with their financial advisor, younger investors (18-34) (45%) and those residing in British Columbia (46%) and Quebec (38%) were substantially more likely to have engaged in a conversation than older investors (35+), and those residing in Ontario (27%) or the Atlantic provinces (19%).

A knowledge gap is holding adoption back: Of the respondents who said that they are not interested in responsible investment, the top reason, cited by 31% of them, was that they do not know enough about it to be interested. Notably, women (42%) and younger investors (18-34) (38%) were most likely to respond that they do not know enough about responsible investment, despite their overall higher interest level in adopting responsible investment portfolios.  

Investors are looking for the companies they invest in to act responsibly: When investors were asked about the importance of the companies they invest in acting in a responsible manner, 86% of respondents noted it was either “very important” or “somewhat important”. In terms of importance, 42% of younger investors (18-34) noted it was “very important”. This was particularly prevalent in British Columbia, where 40% of all respondents said it was “very important”.

Environmental causes matter most to investors: For almost half (45%) of respondents, environmental causes, such as climate change and water, matter the most in socially responsible investments. Almost a third of respondents (32%) ranked social causes, such as health and safety, human rights and communities as most important, while ten percent rated governance issues such as board diversity and CEO compensation as the most important socially responsible cause.

To learn more about RBC Global Asset Management’s approach to responsible investment, please visit www.rbcgam.com/ri-ready.

About the RBC GAM Survey:

These findings are from an Ipsos survey conducted on behalf of RBC Global Asset Management Inc. between August 13, 2019 – August 23, 2019. In total, 1,500 Canadian retail investors, who were either currently investing, or considering investing over the next two years, were surveyed evenly based on asset level: <$25,000; $25,000 to <$100,000; $100,000 to < $250,000; and $250,000 +. 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 survey is accurate within a credibility interval of +/- 2.9 percentage points, 19 times out of 20. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error. RBC GAM Inc. is a member of the RBC GAM group of companies and an indirect wholly owned subsidiary of Royal Bank of Canada.

About RBC Global Asset Management

RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) and includes money managers BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to institutional, high-net-worth and individual investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded funds and specialty investment strategies. The RBC GAM group of companies manage approximately $460 billion in assets and have approximately 1,400 employees located across Canada, the United States, Europe and Asia.