Study reveals a surprising lack of familiarity
A recent study has uncovered a knowledge gap among Canadians when it comes to private investments, despite Canada's presence in the global pension fund landscape. The study revealed that 60% of Canadians surveyed were not familiar or not at all familiar with private investments.
The study, conducted by research firm IPSOS and commissioned by Harbourfront Wealth Management Inc. (Harbourfront), aimed to understand Canadians' attitudes, usage, and awareness of private investments.
“Most Canadians aren’t very familiar with private investments, which have been a major component of the pension fund toolkit for years,” said Christine Tessier, chief investment officer at Harbourfront.
“Corporate-defined benefit plan availability is decreasing. Canadians need a broader toolkit, that includes private investments, to plan for their futures. The IPSOS study clearly demonstrates that among Canadians, a quarter feel their financial institution doesn’t give them access to all types of investment products. New technologies, combined with increased oversight, are changing the face of this industry.”
The results revealed that a significant portion of Canadians feel that they are missing out on investment products they desire, with 24% indicating that their financial institutions do not provide access to all types of investment options.
The study also found that nearly half of Canadians (42%) are open to switching financial institutions to gain better access to investment products, while 43% are willing to change their investment advisors for the same reason.
Private investments, which encompass private lending, private equity, and private real estate, have been utilized by institutional investors such as the Ontario Teachers' Pension Plan (OTPP) and the Canada Pension Plan Investment Board. These investments have proven to be lucrative, with OTPP surpassing its benchmark and reporting a 4% annual return in 2022.
“Pension and endowment funds have been investing in private securities for decades,” said Danny Popescu, chief executive officer of Harbourfront.
Harbourfront, an independent wealth firm in Canada, is striving to bridge the knowledge gap and help Canadians understand the potential benefits of private investments.
“It’s important for Canadians to gain a better understanding of private securities and how the addition of pension-style investing can help diversify their portfolios, especially during volatile markets,” said Tessier.
“We’re advocates of empowering Canadians to become more financially independent. Harbourfront’s multi-manager, multi-strategy products are unique within the industry and this new IPSOS study makes it clear that Canadians want more institutional grade quality opportunities—and they’re willing to make the switch to get it.”
