Mutual funds continue to be the savings vehicle of choice for Canadian investors, suggests research conducted on behalf of The Investment Funds Institute of Canada (IFIC).
According to a report published on Friday, Canadian Investors’ Perceptions of Mutual Funds and the Mutual Fund Industry 2015, 87% of investors surveyed say funds will help them meet their financial goals. Fewer investors express confidence in stocks (62%), GICs (61%) and bonds (55%).
“For the past decade, Canadian mutual fund investors have consistently expressed strong confidence in the ability of mutual funds to meet their goals, more than any other financial product,” says Joanne De Laurentiis IFIC president and CEO, in a statement. “This reflects our industry’s success in meeting investors’ needs in an ever-changing marketplace.”
Confidence in financial advisors remains high, the report finds, with 94% of mutual fund investors surveyed acknowledging they can trust their advisor to provide them with sound advice. Advisors continue to be by far the preferred source of information about mutual funds through conversations (82%), advisor e-newsletters (64%) and advisor websites (53%), the report says. The other top source is news media (57%).
According to the report, the vast majority (92%) of respondents say their advisor discussed the suitability of their chosen product relative to their individual investment goals. This indicates slow but steady improvement over the past seven years in the number of suitability discussions reported by investors, IFIC notes.
Ninety-one per cent of respondents agree that they received a better return on their investments than they would have without an advisor, the report finds.
New to the report this year are questions to assess the type of services that investors are receiving. The study finds that more than half of mutual fund investors who use an advisor receive services such as investment planning (58%), financial planning (55%), and retirement planning (48%).
The report also finds that almost nine out of 10 investors are satisfied with the value for money they receive in terms of both service and performance.
Regarding fees, the proportion of investors who recall their advisors discussing fees has been in decline since 2011, the report finds.
In 2015, 56% of investors could remember having a discussion with their advisor about fees at the time when they made their most recent mutual fund purchase. This is down significantly from 64% in 2011, the report says.
This data, in combination with responses to questions first asked in previous years about fees, says IFIC, may help the industry and others to assess the impact of phase 2 of the client relationship reforms (CRM2).
The research, which was conducted by Pollara Inc. of Toronto, is based on 1,008 telephone interviews with mutual fund holders 18 years of age or older who make all or some of the decisions regarding mutual fund purchases in their household. All interviews were conducted between July 20 and Aug. 10.