FIRST TIMERS CAUTIOUS ABOUT RRSPS
By Adnews Staff
First time RRSP contributors are being very cautious, while veterans who contributed in each of the past five years are pursuing investing and diversification, according to Royal Trust's eighth annual RRSP survey. Thirty per cent of first-timers will invest in mutual funds, compared to 57% of seasoned investors. Twenty-one per cent of beginners say their savings accounts will represent the biggest proportion of their contribution, compared to 4% of veterans. Bonds are favored by 15% of first timers, but only 3% of veterans prefer them. About 47% of first time investors consult a financial advisor, while 73% of regular investors do so. The poll also showed that 44% of Canadians have either already made, or plan to make an RRSP contribution for the 1998 tax year. Mutual funds continue to be investors' favorite with 47% saying they will make up the greatest proportion of their RRSP contribution. Mutual funds are most popular in the Prairies and Ontario. British Columbia and Quebec are at the lower end of the scale. In regards to the amount of communication to consumers during RRSP season, 14% of the respondents believe there is too much attention, 25% believe there is too little attention and 54% believe the amount of attention is just right. Thirty-three per cent of respondents ranked the Internet as an important source for RRSP information and advice. The reasons for not contributing to an RRSP include being too concerned about day-to-day financial situations rather than retirement, finding other ways to save for retirement, 31% want to wait to see what happens to financial markets before investing and 24% said they still expect the government to provide them with retirement income. The survey was conducted by Environics Research Group of Toronto.