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Investor Economics

2016 Group Retirement Savings and Pensions Report

Change is upon us. Demographic, technological and regulatory shifts are coalescing across the wealth management landscape. The competitive landscape is set to be upended in the process. Wealth managers are questioning how their organizations should—or should not—adapt in order to capitalize on the opportunities ahead.

The 2016 edition of the Group Retirement Savings and Pension Report (GRSP) has been produced with this theme of change in mind. Resonating throughout the report is the impact that the coalescence of these trends may have on the group business and the introspection it is leading to among group retirement market participants.

Prominent among this discussion are the topics of retirement and of the in-retirement user experience. With more than half of Canada’s household financial wallet in the hands of households aged 65+ by mid-twenties and the first baby boomer turning 71 in 2017, client retention in retirement has risen up the agenda. The study takes a close look at opportunities and challenges in retaining clients throughout retirement from the perspective of a group retirement services (GRS) provider and in relation to how group retirement business lines align with broader retirement strategies at banks, life insurers and investment fund companies.

Demographics, however, is not the sole factor changing the demand curve for the group business. Innovations in the client experience developed in the consumer retail sector have permeated the financial services sector and are increasing clients’ expectations of the user experience. This is as true for retail, as it is for group, wealth management businesses. Group record-keeper responses are outlined in this edition to provide readers with an understanding of how the nascent fintech movement is and how it is not changing the “game”.

GRS providers, however, do not have a monopoly on retirement. Brought into focus by the Ontario government’s Ontario Retirement Pension Plan (ORPP) initiative, the role of government in assisting Canadians in saving for retirement featured prominently again in 2015 and into 2016. CPP expansion ultimately won the day, with an agreement reached in June 2016. With public pension reform seemingly resolved for decades to come, the remaining question is how it changes the demand equation for the industry. Utilizing our proprietary Investor Economics WealthMINE database we set out to explore this question.

The 2016 Group Retirement Savings and Pensions Report is a must-read for everyone with a stake—or an interest—in Canada’s retirement industry. While the publication is centred on the record-keeping and group retirement product shelf in Canada, the trends explored and discussed are not exclusive to group business lines. Competition for retirement dollars will not respect retail versus group platform demarcation lines, but rather feature an open competition between all wealth managers. The adaptive maneuvers by record-keepers and asset managers currently underway in the GRS marketplace both reflect and portend adaptions in its retail counterparty.

Report Information

  • Date Posted: December 8, 2016