Investor Insight: The Drag of Taxes

In Canada, where top rate taxpayers can lose more than half of their investment income to taxes, we find that investors are acutely aware of the need to more effectively manage tax drag on their portfolio. This should be an important consideration for financial professionals, as 20% of investors say the ability to deliver on this critical issue is one of the factors they consider in choosing an advisor.

Our recent pulse survey of 500 Canadian investors uncovers sentiments and expectations around the topic of managing taxes and what financial professionals can do to help their clients optimize this essential step in portfolio management.

Highlights:

  • Almost six in ten (58%) Canadians estimate that taxes on their portfolio account for more than 5% of their annual tax bill.
  • Canadian investors believe that the taxes on their investment income have equal or greater impact on their returns than advisor fees.
  • Only 54% of those surveyed report their financial advisors have spoken to them about the impact of taxes on their investments.

Download the 2017 Pulse Survey of Canadian Investors: Helping Clients Understand How Taxes Can Affect Portfolios

Natixis Global Asset Management, Pulse Survey of Individual Investors conducted by CoreData Research, April 2017. Survey included 500 Canadian investors.