Canadian investors remain extremely reliant on their financial advisors for guidance, and consider the relevancy of the advice the most important factor contributing to the value of that advice, a recent survey suggests.

In a poll of 5,000 Canadian investors by global research and technology company Vision Critical, the company found that 83% of investors expect to call their financial advisor when they need financial advice and guidance, with 47% making that their first call.

Investors with assets of at least $1 million are more likely than lower net worth investors to seek out their financial advisor before looking at other information sources.

The next most popular resource for investors looking for information is news and industry websites, with nearly 40% of Canadian investors referring to these sites to help frame their financial strategies, according to the survey.

Young investors and lower net worth rely on their family and friends for advice to a greater extent than other groups, with 43% of 18-34 year olds calling family members for advice.

The definition of value in financial advice varies across investor groups, but the most common response was relevancy of advice – advisors’ ability to apply their insights into current financial and market conditions to individual investors’ personal needs and lifestyle. Other top responses included trust, results and advisor expertise.

Quality advice is vital to maintaining client loyalty, according to Demitry Estrin, SVP of finance at Vision Critical.

“We know from earlier studies that only a very small percentage of investors who are satisfied with the quality of advice they receive will go looking for a new financial advisor,” he said. “However, half of investors who weren’t convinced that they had been receiving good advice were looking to switch.”

Investors have high expectations in terms of the frequency of communications from their advisor. For more than half of respondents, annual communication is not enough and 34% prefer information on their investments at least once a quarter.

High net worth individuals have significantly higher expectations, with more than 60% expecting traditional investment communications at least once a quarter.

The topics that investors want updates on most regularly include: traditional investments, risk management, portfolio diversification and alternative investments.

In contrast, investors said it’s less important to regularly address such topics as insurance products, charitable donations, inheritance planning and estate planning. These topics only need to be discussed once every few years, respondents said.

IE