Briefly: “Boomers seen delaying retirement” and more of Wednesday’s news

More than one-third (37%) of boomers who own their own business are planning to put off their retirement due to the current economic situation, according to the 19th Annual RBC RRSP Poll.

Among all boomers, the percentage who said they were delaying retirement was much lower, at 28%. As for how long they will put it off, 43% said it would be delayed by only a year or two, while 37% said they would stay in the workforce for three to five years longer than initially planned. Nine per cent did not know how long they would delay retirement.

“Knowing when to leave the workforce is a tough decision,” said Lee Anne Davies, head, advanced retirement strategies, RBC. “The best way to decide when to retire is to think about the lifestyle you want to lead in retirement and create a plan to help ensure financial stability and built-in flexibility to adjust to changing life and economic conditions.”

The survey found that 32% of retiring boomer business owners plan to never fully retire, compared to 13% of average boomers. Only 37% of retiring boomer entrepreneurs expect to be fully retired at the age of 65, compared to 47% of the Canadian boomer average.

“Even for Canadian entrepreneurs who never intend to fully retire from their business, it’s important to regularly fine-tune their long-term plan,” says Davies. “Whether you foresee gradually stepping away from your business, working part-time or full time, having a plan that clearly outlines your lifestyle goals and sources of income will help business owners prepare for their golden years.”

The survey found that 77% of all boomers are planning their retirement, and that 95% have an RRSP. More than 40% of boomers with an RRSP plan to contribute the maximum allowable amount to their RRSPs.

• • •

Canadians plan RRSP cutbacks

With job cut announcements now a fixture on the nightly news, many Canadians are looking to enlarge their safety nets. It’s common sense, of course, as a non-registered rainy-day fund can help protect clients in the event of any sudden changes in their personal financial situation.

The BMO Savings Monitor Survey has found that 57% are looking for ways to improve their savings, with one in five planning to cut back on purchases.

That’s very commendable, but unfortunately for the advisor, many Canadians are not going to limit just their lattes. A third are planning to reduce their RRSP contributions. A quarter of survey respondents said they will not make any RRSP contribution at all. The immediate fear of a job loss is clearly trumping the more distant concerns over retirement.

“We applaud Canadians who are responding to the economic downturn by reconsidering their spending and savings habits,” said Linda Knight, president and chief operating officer of BMO Mutual Funds. “We also strongly encourage Canadians to continue making RRSP contributions so that they aren’t trading their long-term financial future in the short term.”

Make no mistake, though; this newfound thrift could pass quickly if the economy picks up again. Forty-three per cent of respondents said they would return to their normal spending habits if the economy took a sudden turn for the better.

Despite the economic downturn and the fear of losing their jobs, many Canadians still do not think they need a financial plan. The survey found 24% said they would start to plan if they made more money, and 13% said they do not need a plan at all.

“Financial plans are not only for the affluent,” says Knight. “Planning for a financially secure and rewarding future is critical to Canadians.”

The BMO Savings Monitor Survey is a three-part series gauging the opinions of Canadians on the global financial crisis and its impact on their saving and investing strategies throughout the RRSP season.

• • •

Mackenzie hires McElvaine’s firm

Mackenzie Financial has hired McElvaine Investment Management as sub-advisor to Mackenzie Maxxum Canadian Value Fund, effective immediately, and Mackenzie Maxxum Canadian Value Class, effective February 23.

Tim McElvaine, founder and president of McElvaine Investment Management, has followed the same value-oriented investment philosophy over his 20-year career.

He is no stranger to the Mackenzie brand, having served as lead manager of the Mackenzie Cundill Canadian Security Fund from 1992 to 1999 and as manager of the Mackenzie Cundill Value Fund from 1998 to 2003, during which time he was also Mackenzie’s chief investment officer.

“We are delighted to be working with Tim McElvaine and his associates again,” said David Feather, president of Mackenzie Financial Services, Inc. “Our firms have had a long-standing association with one another, and Tim is very familiar to financial advisors across the country.”

The new sub-advisor isn’t the only change in store for the two funds. Effective February 26, 2009, they will be renamed Mackenzie Universal Canadian Value Fund and Mackenzie Universal Canadian Value Class, respectively.

Investors will be asked to vote on a proposal to merge the two funds at a special meeting slated for Q2 of this year.

• • •

KingsGate closes the gate

KingsGate Wealth Management Services has shut its doors after amending its lawsuit against Industrial Alliance Securities Inc.

The court battle, launched in October 2007, alleges Industrial Alliance unlawfully terminated contracts that were critical to KingsGate’s survival. The smaller firm is seeking damages in excess of $3 million, plus punitive damages.

“We are extremely disappointed with the way our partnership evolved with Industrial Alliance Securities,” says Fred Roberts, CEO of the KingsGate Group of Companies. “We were very proud that our small, independent firm was able to attract the attention of a huge company like Industrial Alliance back in 2005. Unfortunately, Industrial Alliance did not live up to the commitment we had expected, and we now have little choice but to close our doors.”

(02/18/09)