Despite the hefty toll the financial crisis has taken on client accounts, a vast majority of investors remain satisfied with their relationship with their financial advisor, results of a recent survey show.
Results from the fourth annual Landscape Study of Mutual Fund Investors in Canada, which were presented at the Dealer Advisor Forum in Toronto on Tuesday, show that 78% of investors surveyed were satisfied or very satisfied with their relationship with their financial advisor. This compares with 83% of respondents in 2008.
“[These are] very high and stable satisfaction levels with advisors in terms of the advice that they give, despite these difficult times,” said Craig Worden, senior vice president of public affairs at Pollara, which conducted the survey of more than 1,000 mutual fund holders in Canada in late May and early June.
The survey showed that 93% of investors were satisfied with their advisor’s assessment of their risk tolerance when they opened their account. This was down just one percentage point from last year. Of the respondents, 90% were satisfied with their advisor’s ongoing understanding of their risk tolerance, down from 92% in 2008.
Meanwhile, the market turbulence of the past year has had a noticeable impact on investors’ confidence in investment products. Investors’ confidence in mutual funds fell to 74% from 78% last year. Given the market turbulence of the past year, it is surprising that confidence in this category did not drop by a larger margin, according to Worden.
“When we were conducting this survey, we had expected that they might have taken a stronger drop, given the events that have occurred,” he said at the conference. “What’s most surprising is just how stable and high the satisfaction levels with advisors, and the confidence levels with mutual funds remain, despite this historic, far reaching recession.”
Investors’ confidence in GICs and other term deposits jumped to 72% from 64% last year, while confidence in bonds surged to 64% from 55% in 2008.
These gains in confidence are not surprising given the relative safety of these types of products in the context of the stock market volatility of the past year, according to Worden.
More than one-third of survey respondents said they had changed their investment style due to the recent market conditions. Of these investors, 26% changed their strategy to seek buying opportunities, while 55% changed their strategy to try to minimize losses.
In terms of the information provided when making investment decisions, 90% of the survey respondents said they were comfortable that they had the right information to make an informed decision, down from 91% in 2008.
But investors have become considerably less satisfied with the information they have on their existing mutual funds. In terms of performance-based information on their funds, 70% of respondents said the information they had answered most or all of their questions about the funds, down from 75% last year. In terms of non-performance-based information, 65% of respondents said most or all of their questions had been answered, down from 73% in 2008.
IE
Investor confidence in advisors remains high, despite volatile markets
Confidence levels with mutual funds stable: survey
- By: Megan Harman
- September 22, 2009 September 22, 2009
- 15:59