ATB Investor ServicesIn this report “Albertans” = General Population Online Albertans Aged 18+...

ATB Investor ServicesAlberta Investor Beat Tracking ResearchQ1 2017

January 27, 2017

2

To inform business strategy and showcase ATBIS’ deep understanding of Albertans.

1

2

Understand Albertans’ mindset around saving and investing including their intent to save and/or invest based on their confidence in various social, economic and political factors.

Purpose

3

Field Dates

In this report “Albertans” = General Population

Online Albertans Aged 18+

Online (Ipsos Panel)1,004 completes in Q1 2017

Qualifying ParticipantsAges 18+

Sample collected and weighted to be representative of Albertans by age,

gender and region

Q1 2017 January 3 – 11, 2017

Q4 2016 October 11-20, 2016

Q3 2016 July 25–Aug 4, 2016

Q2 2016 April 11–18, 2016

Q1 2016 January 4–14, 2016

Methodology

4

More Albertans are diversifying their investment portfolios, although there has been no real impact on the overall distribution of wealth by category• This quarter there was another significant increase in Albertans prioritizing debt repayment,

reduced spending and saving for vacation.

1

2

Optimism toward investing increased slightly this quarter, with those living in Calgary being more optimistic than others• While the optimism index for mutual funds and real estate remains steady, Albertans are feeling

more positive about various investment products; especially stocks.• Although Albertans continue to be the least optimistic about ‘micro-economic’ factors overall

(i.e. cost of living), there is some improvement in the area of employment opportunity. There is also an increase in optimism toward the Alberta economy, oil prices, and the stock market.

3About 6 in 10 Albertans claim to be impacted by the drop in oil, a significant increase from last quarter and from this time last year• Although cost of living continues to be the main way Albertans are impacted by oil prices, fewer

Albertans cite being impacted by a decline in the value of their investments• This quarter, significantly more Albertans have started to look for work outside of the

province in response to the impact. Also, more Albertans have taken out a loan or increased an existing line of credit compared to this time last year.

Executive Summary

5

4

Nearly all Albertans (96%) are aware that their taxes are based on paid income• The most common method of completing taxes remains the ‘do it yourself’ approach, either

using an online software or a paper and pencil• Compared to last year, significantly more Albertans are expecting their tax rates to increase and

the main reason is that they’ve earned more income. Conversely, of those who claim their rates will be lower, there is a significant increase in those who cite a reduction in earned income compared with last year.

• Just over 4 in 10 Albertans are familiar with how various savings & investment products are taxed (consistent with last year). There is, however, a significant increase in the number of Albertans who feel very strongly that this taxation impacts how they would select their products.

5

Fewer than half of Investors in Alberta claim they pay fees for their investments• Of those who claim to pay fees, just under a quarter feel they’re very familiar with what they

pay; 39% of those who are very familiar believe their fees have a big or very big impact on the performance of their portfolio

• Ahead of the deadline for CRM2, we find that only a quarter of investors in Alberta who claim to pay fees have had their fee structure explained to them in the past 12 months. In fact, 60% of investors are still unaware of what CRM2 is.

Executive Summary

Investor Beat Investing Optimism Index

Investor Beat Optimism Index

Methodology

• ATB Investor Services’ Investor Beat Optimism Index is based on a representative sample of Albertans who rate their optimism toward investing, different investment products and economic factors.

• The Investor Beat Optimism Index is calculated based on a net positive score which is then rescaled to fit an index ranging from 0 to 100.

51 51

48 49

4746

47

4042

44

46

40

45

50

55

Q3 2016 (W5) Q4 2016 (W6) Q1 2017 (W7)

Balanced Mutual Funds

Real Estate

Cash

Stocks (directly and equity funds)

Alternatives (precious metals,foreign currency, collectables)Bonds

Other

54 5456

50

55

60

65

Overall Investing Optimism Score

8Base: All respondentsTaking everything into consideration, is now a good time or bad time to invest your money? (Q2NEW)Specific Products: More specifically, is now a good time or bad time to invest in the following? (Q2NEWa)

Index Range: 0 to 100.

8


Optimism with Specific Investment Products:

Less Optimistic

50

More Optimistic

Optimism toward investing rose 2 points since previous quarter. Optimism toward many different investment product has also increased, with ‘Stocks’ experiencing the highest rise of 4 points. ‘Balanced Mutual Funds’ and ‘Real Estate’ remain steady.

Similar to the previous quarter, males and those with investible assets over $500K are the most likely to feel it is a good time to invest than their counterparts.

Albertans living outside of Edmonton and Calgary are more likely to feel that it is a bad time to invest than those living in the major city centres.

9

Q3 2016 (n=100)

Q4 2016 (n=152)

Q1 2017 (n=195)

Economy - Net 27% 43% 36%

Poor/ unstable economy 19% 16% 10%

Market is getting better - 9% 12%

Low costs of goods/services 6% 14% 5%

Better/stable economy 1% 5% 5%

Recession Period - 1% 4%

Oil price is on the rise - - 4%

Investment Products - Net 52% 45% 35%

Good time to invest 27% 29% 15%

Low stock market 26% 19% 12%

Lots of market opportunities - - 4%

New US Administration - - 4%

Note: Only mentions of 4% or higher for Q1 2017 are shown.

/ Significantly higher/lower than previous wave

Base: Rated good time to investQ2bNEW. Why do you think now is a good time to invest?


Reasons that it’s a Good Time to Invest For Albertans who feel that it is currently a good time to invest, feeling that the market is getting better, the

unstable economy, low stock market and a general positive sentiment are the top reasons mentioned. This quarter, Albertans also began mentioning the new US administration is a reason now is a good time to invest.

Gen-Xers and Boomers are more likely to mention that they feel the market is getting better compared to Millennials.

10

Q3 2016 (n=82)*

Q4 2016 (n=156)

Q1 2017 (n=140)

Economy - Net 18% 42% 37%Poor economy 14% 33% 26%Unemployment 5% 10% 10%Recession - 3% 4%

No money - Net 25% 26% 33%No extra money to invest 17% 22% 29%

Investment - Net 26% 15% 8%Low interest rates 13% 9% 5%

Miscellaneous - Net 10% 20% 24%Current political atmosphere 4% 6% 9%Increased/additional taxes - 4% 6%Low Canadian dollar 2% 3% 4%


Among those Albertans who feel it’s a bad time to invest, poor economy and not having additional funds to invest continue to be the main reasons why Albertans believe it is bad time to invest.

Note: Only mentions of 4% or higher for Q1 2017 are shown.* Small base size, interpret with caution

Base: Rated bad time to investQ2cNEW. Why do you think now is a bad time to invest?


Reasons that it’s a Bad Time to Invest

38

43

27

36

40

23

20

25

30

35

40

45

50

55

Canadian economy Global economy Alberta economy

Q1 2017 (W7)

Q4 2016 (W6)

11Index Range: 0 to 100.

More Optimistic

Lower Relationship with Investing Optimism Higher

Less Optimistic

50

Base: All respondents Q3. Please rate how you view the following factors at this point in time.

Q1 201736

Q4 201633

Average Index Score for Overall Economies


Overall Economies The average index score for optimism toward overall economies rose by 3 points this quarter. Sentiment

toward the Alberta economy rose the sharpest by 4points. Males and those who live in Edmonton have more positive perceptions of the provincial economy than

their counterparts.

4950

42

31

4448

44

25

20

25

30

35

40

45

50

55

Stock MarketInterest Rates Real EstateMarket/Prices

Oil Market/Prices

Q1 2017 (W7)

Q4 2016 (W6)


More Optimistic


Less Optimistic

50


Q1 201743

Q4 201640

Average Index Score for Macro‐Economic Factors


Macro-Economic Factors Average index score for Macro-Economic Factors also rose by 3 points. This is due to more positive

perceptions about the Oil Market and the Stock Market. Albertans are slightly less optimistic, however, about the Real Estate Market/Prices.

Boomers have more negative perceptions about Real Estate and Interest Rates than their counterparts.

30303031 312927

32

20

25

30

35

40

45

50

55

Cost of living Canadian dollar Employment/ Jobopportunities

Taxes

Q1 2017 (W7)

Q4 2016 (W6)


More Optimistic


Less Optimistic

50


Q1 2017Q4 2016

30

Average Index Score for Micro‐Economic Factors


Micro-Economic Factors Average index score for Micro-Economic Factors remains the same this quarter. Optimism toward

Employment/Job Opportunities rose slightly by 3 points this quarter. Albertans with $25K or less in investible assets and women have the most pessimistic view of cost of

living and job opportunities than their counterparts. Boomers hold negative perceptions of the dollar more so than Gen-Xers and Millennials.

Investor Beat Understanding Albertans DeeperSavings & Investment Goals

15 Base: Q2 2016: (n=512); Q3 2016: (n=1,003); Q4 2016: (n=1,003), Q1 2017: (n=1,004)Q8 (Q8_new in W4). What percentage of your savings and investments are in the following types of products?


Note: Tracking starts from Q2 2016 as product list options were modified in Q2 2016

Have ANY savings or investments product

% of Albertans with this product

% of Albertans total savings/investments by

product

Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Cash

76% 89% 82% 83%

72% 84% 76% 79% 50% 50% 45% 44%

Balanced mutual funds 38% 42% 45% 47% 17% 17% 21% 22%Stocks (directly and equity

funds) 33% 39% 39% 40% 14% 13% 13% 14%

Bonds 17% 17% 19% 22% 4% 3% 4% 4%Real estate (excl. primary

residence) 20% 22% 20% 24% 8% 8% 8% 8%

Alternatives 15% 21% 18% 19% 3% 3% 3% 3%

Other 12% 17% 17% 19% 4% 6% 7% 5%

Understanding Albertans Deeper

Savings & Investment Portfolios The number of Albertans with any savings and/or investments holds steady, with eight-in-ten (83%) reporting to hold

any type of savings or investment product evaluated. The portfolio mix also looks similar to the previous wave, with cash holdings the highest, followed by mutual funds and stocks.

Not surprisingly, Albertans with investible assets less than $25K are more likely to put their money into cash savings, whereas those with over $25K have a more diversified portfolio, that also includes stocks and mutual funds.

The proportion of Albertans with real estate investments is on the rise (24% in Q1’17 vs. 20% in Q4’16), suggesting that Albertans are diversifying. There is still no impact, however, on overall distribution of wealth by category.

15%

7%

8%

6%

77%

85%

84%

83%

8%

8%

9%

10%

11%

6%

5%

4%

82%

85%

87%

86%

7%

9%

8%

10%

16%

5%

5%

4%

77%

85%

86%

86%

7%

10%

9%

10%

17%

5%

5%

5%

77%

81%

82%

77%

6%

14%

13%

18%

Cash

Stocks (directly and equity funds)

Balanced mutual funds

Real estate (excluding your primary

residence)

16

Consistent wave-over-wave, the majority of Albertans with savings and/or investments intend to maintain the same amount for each of the products in their financial portfolio.

While a small proportion, there is an significant increase in intention to boost cash savings and mutual funds in the short-term future this wave.

Base: Have any savings or investmentsQ9 (Q9_new in Q2 2016). In the next 3-6 months do you intend to increase, decrease or keep the same amount of savings and/or investments in each of the following products?



Intent to increase savings/investments (rated 8, 9, 10)

Keep the same amount of savings/investments (rated 3, 4, 5, 6, 7)

Intent to decrease savings/investments (rated 0, 1, 2)

Q4 2016 (n=819)Q3 2016 (n-895)Q2 2016 (n=387)

Q1 2017 (n=837)


Savings & Investment Portfolios

4%

4%

4%

89%

85%

87%

8%

11%

8%

2%

2%

2%

87%

87%

89%

11%

11%

9%

3%

3%

3%

87%

87%

89%

10%

10%

8%

4%

4%

4%

77%

79%

77%

19%

17%

19%

17

Similar to previous quarters, Albertans intend to keep the same amount of investments in alternatives, bonds and other financial products in the short term future.

Base: Have any savings or investmentsQ9 (Q9_new in Q2 2016). In the next 3-6 months do you intend to increase, decrease or keep the same amount of savings and/or investments in each of the following products?



Intent to increase savings/investments (rated 8, 9, 10)

Keep the same amount of savings/investments (rated 3, 4, 5, 6, 7)

Intent to decrease savings/investments (rated 0, 1, 2)

Alternatives

Bonds

OtherQ4 2016 (n=819)Q3 2016 (n-895)Q2 2016 (n=387)

Q1 2017 (n=837)


Savings & Investment Portfolios

42%

26%

24%

22%

22%

40%

23%

23%

22%

21%

42%

26%

23%

24%

23%

40%

23%

19%

19%

22%

39%

25%

21%

18%

20%

36%

22%

21%

17%

19%

18

Saving for retirement and paying down debt continue to be the top two financial goals for Albertans. Overall, the goals of paying down debt, reduced spending and saving for a vacation have been increasing over time.

Reducing spending, saving for a home and vacation savings are more likely to be a focus for Millennials than the other two age cohorts.

Base: All respondentsQ14. Which of the following are financial goals for you personally?

/ Significantly higher/lower than previous wave/ Significantly higher/lower than previous year (Q1’17 vs Q1’16)

52%

49%

45%

44%

42%

52%

43%

38%

40%

40%

48%

46%

40%

40%

43%

51%

44%

35%

37%

42%

46%

45%

38%

39%

44%

51%

38%

32%

35%

41%

Saving for retirement

Paying down debt

Reducing your

spending

Saving for a vacation

Managing day-to-day

finances

Building up an emergency fund

Saving money in case of an

illness/death in your family

Reducing the amount of tax

you pay

Saving for a major purchase

(e.g. car, TV, boat, RV, etc.)

Saving for a house

Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)


Top 10 Personal Financial Goals

19

Financial goals outside of the top 10 continue to remain stable wave over wave. However, saving towards a wedding/honeymoon/baby has significantly gone up in Q1’17, driven by Millennials (27% indicated as a goal).

Base: All respondentsQ14. Which of the following are financial goals for you personally?


20%

19%

19%

13%

12%

21%

18%

17%

12%

8%

20%

17%

17%

11%

10%

19%

13%

14%

9%

9%

18%

15%

15%

10%

10%

18%

16%

12%

9%

6%

Saving for your children’s/

grandchildren’s education

Making charitable donations

Saving for a house renovation

Accumulating an estate

Saving for a wedding/

honeymoon/baby

11%

11%

10%

8%

12%

10%

10%

11%

7%

15%

12%

9%

12%

7%

15%

8%

7%

11%

6%

8%

9%

8%

9%

8%

9%

7%

7%

7%

6%

9%

Starting or owning a business

Buying proper life insurance coverage

Saving for your education

Saving for a second property

Nothing specific, just want to grow

my money

/ Significantly higher/lower than previous year (Q1’17 vs Q1’16)

Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)


Other Personal Financial Goals

50%

50%

49%

48%

47%

49%

37%

46%

48%

41%

48%

47%

44%

43%

42%

48%

39%

44%

37%

39%

54%

37%

52%

39%

36%

48%

46%

48%

39%

37%

House

Wedding/honeymoon/baby


Reducing the amount oftax you pay


20 Base: Financial goals selected (n=varies)Q15. How do you feel about your progress in achieving your financial goals?


59%

55%

54%

52%

52%

52%

54%

45%

55%

49%

55%

52%

48%

44%

45%

50%

46%

39%

50%

46%

52%

50%

46%

48%

51%

53%

53%

50%

55%

47%

Building up anemergency fund

Money in case ofan illness/death in

your family

Major purchase(e.g., car, TV)

House renovation

Paying down debtQ3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017



Financial Goals Albertans Feel Behind On This quarter, building up an emergency fund replaced house renovation as the top financial goal that Albertans feel

behind on. The second most problematic financial goal is saving money in case of an illness/death in the family. Compared to this time last year, significantly more Albertans feel that they’re not financially prepared in case of an

emergency and that they’re not saving as much as they would like to for a vacation. Saving for retirement is the most important financial goal for Albertans, however just under half feel their behind.

Build up an emergency fund

Money in case of an illness/death

in family

Major purchase(e.g. car, TV)

House renovation

Paying down debt

House

Wedding/honeymoon/baby


Reducing the amount of tax

paid


3%

9%

1%

4%

9%

1%

4%

10%

2%

4%

6%

2%

7%

7%

1%

5%

10%

1%

21

For Albertans who are behind in their financial goals, cost of living and unexpected expenses remain the top barriers as to why they are behind in meeting their financial objectives. In particular, cost of living has increased significantly as a barrier versus a year ago.

Cost of living is more of an issue among Millennials, Gen-Xers, residents in ‘Other Alberta’ and women compared to their counterparts.

Base: Behind in achieving financial goalsQ16. You mentioned you are behind in at least one of your financial goals. What is preventing you from being on track?


61%

43%

31%

31%

58%

43%

30%

29%

58%

45%

31%

32%

52%

41%

28%

32%

54%

42%

28%

31%

58%

43%

27%

24%

Cost of living

Unexpected expenses

Low wages

Job loss/ reduction

30%

15%

11%

7%

33%

19%

12%

7%

34%

13%

14%

7%

26%

15%

11%

6%

31%

13%

18%

7%

0%

16%

17%

8%

Too much spending

Taking time to

make it a priority

Low returns

Need financial

advice/ expertise

Wrong savings/

investment product

Other

Don't know

Q3 2016 (n=589)Q2 2016 (n=639)Q1 2016 (n=653)

Q4 2016 (n=616)

Q4 2015 (n=627)

Q1 2017 (n=679)



Reasons for Falling Behind on Goals

22

Compared to the previous wave, significantly more Albertans are anticipating that they will spend less on household expenditures and more on credit card payments in the short term future versus the previous wave. The increase in credit card payments may likely be stemming from the holiday season and the increased expenses incurred during this time.

Base: All respondentsQ17. How do you anticipate your spending to change in the next 3-6 months?


30%

24%

17%

27%

19%

14%

31%

19%

19%

28%

19%

16%

37%

25%

23%

23%

20%

Putting money into savings

and/or investments

Payments to credit card(s) or

line or credit

Spending on day-to-day

household/ personal

expenditures

More (Net) About the Same Less (Net) Not Sure

47%

54%

54%

48%

59%

63%

47%

57%

57%

47%

56%

57%

41%

51%

52%

55%

60%

17%

12%

27%

18%

9%

20%

16%

11%

22%

17%

11%

24%

16%

11%

24%

11%

18%

6%

10%

2%

6%

12%

2%

6%

13%

2%

8%

14%

3%

6%

13%

1%

12%

2%


Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)


Anticipated Change in Spending

23

Significantly more Albertans anticipate spending less on recreation and travel in the short term versus Q4’16. Future spending on home renovations is stable.

Similar to last quarter, half of Albertans project they will spend the same amount on payments to mortgages or loans. Of note, the proportion of Albertans who anticipate a higher spending on mortgage/loan payments has increased compared to last quarter.



14%

17%

13%

12%

11%

12%

15%

13%

13%

14%

14%

12%

16%

17%

15%

15%

16%

15%

Spending on household

renovations

Payments to mortgage or

personal loan

Spending on recreation/

entertainment or travel


34%

50%

44%

37%

53%

49%

31%

49%

45%

29%

48%

43%

29%

45%

41%

28%

44%

46%

28%

8%

38%

25%

8%

33%

25%

9%

37%

23%

7%

37%

27%

9%

40%

30%

8%

34%

25%

26%

5%

25%

27%

6%

29%

30%

6%

34%

32%

8%

28%

29%

5%

27%

32%

4%


Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)



24

Albertans are mostly unsure of how much they plan to spend on education and on recreational vehicles, with around four-in-ten saying they are unsure of what their short-term spending on these items will be.



11%

11%

7%

4%

11%

11%

9%

4%

12%

11%

8%

4%

12%

11%

6%

4%

11%

12%

9%

5%

14%

9%

3%

Spending on education

Spending on personal vehicles

Spending on electronics/

appliances

Spending on recreational

vehicles


36%

53%

43%

26%

37%

52%

40%

28%

36%

50%

41%

25%

31%

47%

38%

22%

31%

43%

31%

19%

44%

37%

19%

17%

22%

38%

26%

15%

23%

36%

23%

15%

24%

37%

25%

14%

22%

38%

20%

15%

27%

45%

28%

26%

42%

30%

37%

14%

13%

44%

37%

14%

15%

45%

37%

15%

15%

46%

43%

20%

18%

54%

43%

17%

14%

49%

17%

12%

48%


Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)



Investor Beat Impact of Drop in Oil Prices

58%

52%52%49%48%

45%

40%

45%

50%

55%

60%

65%

Q1 2017 (W7)n=1,004

Q4 2016 (W6)n=1,003

Q3 2016 (W5)n=1,003

Q2 2016 (W4)n=1,007

Q1 2016 (W3)n=1,004

Q4 2015 (W2)n=1,024

Percent of Albertans Impacted by the Drop in Oil Prices

26 Base: All respondentsQ21. Have you personally been impacted by the recent drop in oil prices?

/ Significantly higher/lower than previous wave/ Significantly higher/lower than previous year (Q1’17 vs Q1’16)

Impact by Drop in Oil Prices Close to six-in-ten Albertans report that they have been personally impacted by the reduction in oil prices, a

significant jump up from the previous quarter as well as a year ago in Q1’16. Calgarians and Albertans under 55 years of age are more likely to feel the effects of the drop in oil prices

than those 55+.

27

For Albertans impacted by the drop in oil prices, cost of living continues to be the top reason why they are impacted, followed by a slow down in business.

Base: Impacted by the recent drop in oil pricesQ22. In what ways have you personally been impacted by the recent drop in oil prices?


51%

38%

27%

48%

36%

26%

47%

44%

26%

41%

35%

30%

45%

37%

24%

43%

39%

19%

Increased cost of

living

Slow down in business

Job loss

Decline in real estate

value

Can't find employment

Salary freeze

Salary reduction

21%

8%

6%

27%

8%

5%

25%

5%

5%

26%

9%

4%

28%

8%

5%

27%

12%

4%

24%

23%

22%

22%

22%

23%

25%

20%

19%

21%

25%

21%

16%

22%

21%

20%

21%

19%

20%

17%

17%

14%

22%

19%

Q3 2016 (n=526)Q2 2016 (n=487)Q1 2016 (n=485)

Q4 2016 (n=517)

Q4 2015 (n=467)

Q1 2017 (n=583)

Decline in investment

value

Reducing business expenses

Other


Impact by Drop in Oil Prices

Ways Albertans are Impacted

28

Reducing one’s spending remains the main change made by Albertans who are impacted by the oil prices drop. Women are more likely than men to claim they have reduced their spending (72% vs. 61%).

Compared to a year ago, significantly more Albertans modify their vacation plans as a result of the drop in oil prices.

Base: Impacted by the recent drop in oil pricesQ23. As a result of the recent drop in oil prices, which of the following changes have you made?


Q3 2016 (n=526)Q2 2016 (n=487)Q1 2016 (n=485)

Q4 2016 (n=517)

Q4 2015 (n=467)

Q1 2017 (n=583)

66%

34%

34%

62%

35%

29%

66%

30%

34%

68%

27%

30%

69%

31%

27%

61%

29%

29%

Reduced your spending

Put off making a big purchase

(i.e., a car, TV, boat, RV, etc.)

Changed a vacation plan

28%

22%

29%

21%

30%

23%

27%

18%

23%

18%

23%

14%

Stopped some of your regular

savings/ investment

contributions

Withdrew some of your long

term savings/ investments



Top 5 Changes Albertans Have Made

14%

13%

13%

14%

12%

11%

15%

12%

11%

13%

9%

9%

9%

10%

8%

29

Looking for work outside of the province has significantly climbed up this quarter. Millennials, Gen-Xers and Males are more likely to be doing this than their comparative cohorts.

Base: Impacted by the recent drop in oil pricesQ23. As a result of the recent drop in oil prices, which of the following changes have you made?


20%

19%

15%

22%

14%

12%

19%

15%

15%

20%

14%

17%

12%

18%

13%

Put off a planned home renovation

Started to look for work outside

of Alberta

Put off buying a new house

Q3 2016 (n=526)Q2 2016 (n=487)Q1 2016 (n=485)

Q4 2016 (n=517)

Q4 2015 (n=467)

Q1 2017 (n=583)


Collected employment

insurance

Shifted your savings/

investments to a more conservative/ lower risk selection

Took out a new loan/started to use

an existing line of credit


Other Changes Albertans Have Made

30 Base: Impacted by the recent drop in oil pricesQ23. As a result of the recent drop in oil prices, which of the following changes have you made?


Q3 2016 (n=526)Q2 2016 (n=487)Q1 2016 (n=485)

Q4 2016 (n=517)

Q4 2015 (n=467)

Q1 2017 (n=583)


9%

7%

6%

8%

7%

5%

10%

4%

10%8%

6%

Planning to leave the province due

to instability in the oil sector

Downsized or remortgaged your

home to reduce expenses

Started up your own business

2%

8%

3%

11%

3%

10%

2%

10%

4%

10%

2%

17%

Other

None


Other Changes Albertans Have Made

Investor Beat Ad Hoc

Investment Fees

32

Among Albertans with investment products (mutual funds, stocks, bonds), just under half (46%) are aware that they pay fees on these products.

Among this sub-group, seven-in-ten report that they are very or somewhat familiar with the fees paid on their investments. Millennials and men indicate higher familiarity than their counterparts.

Base: Has mutual funds, stocks or bonds (n=596)W7AH1. Do you pay fees for your mutual funds, stocks or bonds?

Pays Investment Fees *Familiarity with Investment Fees Paid

46%

36%

18%

Yes

No

Don’t know

Base: (Q1’17) Aware they pay fees for mutual funds, stocks or bonds Base: (Q4’15) Has mutual funds, stocks or bondsW7AH2. How familiar are you with the fees you pay for your mutual funds, stocks or bonds?

3%

27%

47%

23%

10%

24%

44%

22%

Not at allfamiliar

Not veryfamiliar

Somewhatfamiliar

Very familiar

Q4 2015 (n=611)

Q1 2017 (n=276)

*Base definition is different from Q1’17 to Q4’15; interpret with caution

Investor Beat Ad HocAwareness & Familiarity with Investment Fees

7%

5%

4%

2%

2%

4%

5%

13%

10%

7%

9%

9%

11%

33

Among Albertans who claim to be less or not at all familiar with their fees, forgetting what the fees are and having an advisor responsible for the fees are the main mentions cited.

Having an advisor take care of their fees is significantly mentioned more among Boomers than the other two age cohorts.

Base: (Q1’17) Aware they pay fees and are somewhat/Not Very/Not at all Familiar with fees paid Base: (Q4’15) Has stocks/mutual funds or bonds and are somewhat/Not Very/Not at all familiar with fees paidW7AH4. Why are you not VERY familiar with the fees you pay for your mutual funds, stocks or bonds?

31%

26%

18%

14%

14%

11%

8%

30%

23%

12%

16%

You forget what the fees are

Your advisor takes care of the fees

There are too many different fees to remember

They are not outlined in your statement

Fees are only applied during withdrawal

The fees are too confusing/complicated

Someone else manages your investments (i.e.,

spouse, parent, etc.)

You never asked about the fees

Not important for you to know

The company never mentioned any fees

You don’t pay fees

You didn’t know there were fees

Other

Don’t know/not sureQ4 2015 (n=482)

Q1 2017 (n=212)

n/a

n/a

n/a

n/a


Investor Beat Ad HocReasons for Being Unfamiliar with Fees

34

Among Albertans who claim to be very familiar with their investment fees, opinions are divided on the impact fees make on their financial portfolio performance.

Four-in-ten feel that the fees have an extremely big/big impact, while just under one-third are on the opposite spectrum, indicating that fees do not have very much or any impact.

Base: Very familiar with fees paid (n=64)** Small base size, interpret with cautionW7AH3. Overall, how much impact do you think investment fees have on the performance of your portfolio in the long term (i.e. over 10 to 15 years)?

Extremely big impact

17%

22%Big impact

Not very much impact

28%

No impact overall

3%

30%

Some impact

39%

31%

Investor Beat Ad HocImpact of Fees on Portfolio Performance

35Base: Fees paid for mutual funds, stocks or bonds (n=276)W7AH5. Has anyone at the company you have your mutual funds, stocks or bonds at explained the fees you pay?

Base: Fees paid for mutual funds, stocks or bonds (n=276)W7AH6. Were you aware of CRM 2?

*Recency of Explanation of Investment Fees

Over one-third (36%) have had their investment fees explained in the past year. However, there are one-in-five (19%) who have never had their fees explained to them.

For those aware of investment fees, six-in-ten (61%) have never heard of or do not know about the CRM2 rules. This represents an opportunity for ATB to communicate and educate Albertans on this information.

Awareness of CRM 2

18%

18%

21%

24%

19%

12%

13%

15%

30%

29%

Yes within the past 6 months

Yes within the past 6 months-1

year

Yes within the past 1-2 years

Yes over two years ago

Never

Yes

39% No

54%

Don’t know

7%

CRM2 (Client Relationship Model,

Phase 2) are new rules where financial

companies must give their clients detailed

yearly reports outlining fees and

portfolio performance.


Q4 2015 (n=611)

Q1 2017 (n=276)

Investor Beat Ad HocHaving Fees Explained & CRM2 Awareness

Investor Beat Ad Hoc

Income Tax Knowledge

37Base: All respondents W7AH8. Are you aware that you pay both federal and provincial income taxes on your earned income?

Using a software tool to complete tax is the still the most common method Albertans use to file their taxes, followed by using the services of an accountant.

Deduction by employers from your salary remains the most common method Albertans use to pay for income tax.

Declining38%

96% of Albertans are

aware that federal and

provincial taxes are paid on

income

41%

10%

30%

15%

4%

40%

13%

29%

14%

4%

Yourself using a software tool

(i.e., TurboTax, Quick Tax, etc.)

Yourself using paper and pencil

Accountant

Your spouse/partner/friend/

other family member

Other

Your employer deducts your income taxes from

your pay

You are self-employed and you pay when you file your

income tax return each year

You are self-employed and you make installment

payments throughout the year

Don’t know

Not applicable

51% complete taxes by themselves in Q1’2017

Tax Return Completion Method

66%

12%

5%

4%

13%

64%

10%

4%

5%

16%

Federal/Provincial Tax Payment Method


Base: All respondentsW7AH9. What payment method do you use to pay federal and provincial income tax?

Base: All respondents W7AH7. Personal Income Tax season is coming up. Typically, who completes your personal income tax return?

Q1 2016 (n=1,004)

Q1 2017 (n=1,004)

Investor Beat Ad HocIncome Tax Completion & Payment

38 Base: All respondentsW7AH10. Overall, for you personally, are your 2016 income tax rates (% of your 2016 income that goes to federal and provincial taxes) …

Compared to a year ago, significantly more Albertans are anticipating that their income tax rates will be higher in 2016 than 2015.

In addition, there is a surge in the number of Albertans who believe they will be paying more income taxes this year compared to the previous tax year. Albertans with investible assets over $25K are more likely to believe they will be paying more taxes than those with assets under this threshold.

Declining38%

Perception of Personal Income Tax Rates vs. Previous Year


27%

33%

14%

26%

22%

38%

13%

27%

Higher than previous

The same as previous

Lower than previous

Don’t know

Payment of Personal Income Taxes vs. Previous Year

34%

34%

18%

14%

25%

39%

19%

17%

More

The same

Less

Don’t know

Base: All respondentsW7AH12. Do you think you will pay more or less (total $ amount) in personal income taxes on your income from 2016 compared to 2015?

Q1 2016 (n=1,004)

Q1 2017 (n=1,004)

Investor Beat Ad HocPersonal Income Tax Rate Perceptions

39 Base: Perceived higher/lower tax rates than 2015W7AH11.Why are your 2016 income tax rates [higher/lower]?

Among Albertans who believe their income tax rates are going up, higher income earnings, followed by changes to tax rates are the main mentions.

For those who feel their tax rates will be lower in 2016, earning less income is overwhelmingly the top mention, with eight-in-ten citing this reason. In addition, this is significantly up compared to a year ago.

Reasons Income Tax Rates are Higher(Among those who perceive that their tax

rates are higher)


Reasons Income Tax Rates are Lower(Among those who perceive that their tax

rates are lower)

54%

39%

9%

3%

4%

3%

61%

35%

6%

1%

2%

5%

You earned more income

Changes to tax rates/

income bracketsClaimed more

deductions/credits

Received professional advice on taxes

Other

Don`t know

You earned less income

Claimed more deductions/ credits

Changes to tax rates/

income bracketsReceived professional

advice on taxes

Other

Don`t know

80%

14%

13%

5%

6%

1%

65%

10%

26%

3%

5%

5%

Q1 2016 (n=128)

Q1 2017 (n=140)

Higher Rates vs. Previous YearQ1’2016: 22%Q1’2017: 27%

Lower Rates vs. Previous YearQ1’2016: 14%Q1’2017: 13%

Investor Beat Ad HocReasons Albertans think Tax is Higher/Lower

40 Base: All respondentsW7AH13. How familiar are you with the changes to the income tax bracket rates that the government is introduced in 2016?

Familiarity with the changes to tax bracket rates in 2016 has significantly declined compared to last year (37% vs. 46%).

Millennials (41%) are more likely to be familiar with the tax bracket changes than Boomers (32%), as well as men compared to women (45% vs. 30%).


Q1 2016 (n=1,004)

Q1 2017 (n=1,004)

23%

39%

30%

7%

22%

32%

39%

7%

Not at allfamiliar

Not veryfamiliar

Somewhatfamiliar

Very familiar

Top 2 Box:Q1’2016: 46%Q1’2017: 37%

Investor Beat Ad HocFamiliarity with 2016 Tax Bracket Changes

41 Base: All respondentsW7AH14.How familiar are you with how different savings and/or investment products (gains and losses) are taxed?W7AH15.How strongly do tax implications impact which savings and/or investment products you select?

Over four-in-ten (44%) Albertans continue to be very/somewhat familiar with the taxes implemented on saving/investment products.

There is a shift on how tax implications play a role in investment product selection, with significantly more Albertans indicating this plays a very strong role in choosing investment products versus the previous year.


23%

32%

36%

8%

23%

33%36%

8%

Not at allfamiliar

Not veryfamiliar

Somewhat familiarVery familiar

Familiarity with Taxes on Savings/Investment Products

Impact of Tax Implications on Selecting Savings/Investment Products

Q1 2016 (n=1,004)

Q1 2017 (n=1,004)

20%

64%

16%

14%

62%

24%

Very strongly(rated 8, 9, 10)

Neutral(rated 3, 4, 5, 6, 7)

Not at all(rated 0, 1, 2)

Q1’2016: 44%Q1’2017: 44%

Investor Beat Ad HocTaxes on Investment Products

Investor Beat Demographics

43

Demographics

Base: All respondentsD1. Please indicate your gender.D2. Which age range do you belong to?D3. In which area of Alberta do you live?


D7. Which of the following best describes your total household income?D8. Which best describes your total financial savings and investments? This includes savings deposits, stocks, bonds, mutual funds, other investments and cash, inside or outside registered accounts, but excluding the value of your home(s)?

18 to 34

33%35 to 54

38%55+

29%

50%

Gender split consistent across all waves

50%

Age split consistent across all waves

Edmonton

33%Calgary

36%

Other Alberta

30%

Regional split consistent across all waves

$30K or less 10% 12% 14% 12% 11% 12%$30K to $50K 15% 15% 12% 14% 14% 17%$50K to $80K 20% 21% 18% 20% 21% 20%$80K to $100K 14% 14% 12% 14% 11% 13%$100K to $150K 16% 16% 17% 16% 19% 15%$150K to $250K 9% 7% 6% 6% 8% 8%$250K or more 2% 1% 3% 2% 2% 1%Prefer not to say 11% 11% 15% 12% 12% 11%Don’t know 2% 2% 2% 3% 3% 3%

None - <$25K 26% 32% 31% 35% 31% 35%$25k–<$100k 22% 21% 18% 17% 17% 20%$100k–<$500k 25% 21% 19% 19% 22% 19%$500k+ 10% 8% 9% 10% 9% 9%Prefer not to say 13% 12% 20% 15% 15% 13%Don’t know 4% 5% 4% 4% 5% 4%

Investible Assets

Household Income

Q3 2016 (n=1,003)Q2 2016 (n=1,007)Q1 2016 (n=1,004)

Q4 2016 (n=1,003)

Q4 2015 (n=1,024)

Q1 2017 (n=1,004)


Investor Beat AppendixProgress on Achieving Financial Goals



15%

14%

10%

9%

36%

36%

38%

38%

14%

14%

10%

9%

36%

40%

40%

40%

16%

11%

13%

11%

37%

40%

37%

40%

5%

10%

8%

7%

48%

43%

42%

41%

9%

7%

6%

6%

47%

39%

47%

35%

8%

4%

7%

9%

50%

34%

45%

37%

Children’s/ grandchildren’s

education

Your education

Vacation

Retirement

40%

39%

47%

49%

43%

37%

41%

46%

36%

40%

42%

44%

35%

35%

39%

44%

34%

43%

36%

52%

34%

47%

37%

48%

Savings for …

Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck



Progress of Achieving Financial Goals



6%

8%

7%

34%

36%

29%

6%

6%

8%

36%

32%

29%

10%

6%

9%

31%

41%

25%

5%

6%

5%

34%

35%

25%

6%

6%

5%

35%

30%

21%

6%

2%

4%

28%

34%

25%

Major purchase (e.g., car, TV)

House renovation

House

54%

52%

50%

45%

55%

49%

48%

44%

48%

39%

50%

48%

46%

48%

54%

50%

55%

48%

Savings for …


Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck





7%

8%

12%

29%

25%

35%

11%

14%

11%

26%

28%

32%

10%

7%

11%

31%

18%

34%

5%

7%

8%

33%

30%

37%

6%

5%

5%

32%

29%

22%

5%

7%

5%

34%

21%

19%

Money in case of an illness/death

in your family

Wedding/ honeymoon/baby

Second property

55%

50%

40%

54%

37%

47%

52%

47%

47%

46%

39%

30%

50%

37%

48%

53%

46%

61%

Savings for …


Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck





14%

13%

8%

30%

51%

45%

16%

13%

8%

27%

52%

48%

13%

12%

9%

31%

56%

46%

12%

13%

11%

35%

59%

41%

11%

10%

6%

23%

60%

50%

3%

9%

8%

25%

64%

46%

Buying proper life insurance

coverage

Managing day-to-day

finances

Reducing your spending

43%

36%

44%

36%

34%

42%

39%

31%

44%

29%

26%

45%

47%

29%

42%

56%

26%

42%

Savings for …


Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck





17%

10%

10%

45%

43%

35%

11%

8%

12%

56%

45%

31%

10%

17%

15%

47%

31%

21%

13%

15%

13%

56%

48%

29%

12%

7%

6%

52%

38%

25%

10%

11%

6%

53%

46%

29%

Making charitable donations

Accumulating an estate

Starting or owning a business

33%

38%

43%

29%

38%

35%

34%

38%

45%

26%

28%

37%

28%

47%

48%

31%

36%

38%

Savings for …


Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck





7%

6%

5%

36%

40%

29%

7%

7%

9%

41%

43%

31%

11%

9%

8%

39%

42%

31%

8%

11%

9%

48%

40%

31%

6%

6%

5%

49%

41%

34%

7%

6%

6%

51%

45%

33%

Reducing the amount of tax you

pay

Paying down debt

Building up an emergency fund

48%

52%

59%

48%

49%

52%

43%

45%

55%

37%

46%

50%

39%

51%

52%

39%

47%

53%

Savings for …


Q3 2016Q2 2016Q1 2016

Q4 2016

Q4 2015

Q1 2017

Behi

nd (N

et)

Ahe

ad (N

et)

On

Tra

ck



51

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ATB Investor ServicesIn this report “Albertans” = General Population Online Albertans Aged 18+...

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