As the investment market experiences increased turbulence amid economic uncertainties, the expertise and guidance of investment advisors is becoming more important in enhancing overall customer satisfaction, according to the J.D. Power and Associates 2008 Canadian Investor Satisfaction Study released today.

The study finds that overall investor satisfaction has decreased to 720 on a 1,000-point scale in 2008-down from 763 in 2007 among full-service investment firms.

The most significant decline among all factors examined in the study is satisfaction with investment performance.

Now in its third year, the study provides benchmarks for investor satisfaction that allow individual investment institutions in Canada to evaluate how they compare to competitive firms.

Six factors are used to evaluate overall investor satisfaction with full-service investment firms and financial institutions offering wealth management and private banking services: account set-up and offerings; account statements; convenience; cost; investment advisor; and investment performance.

“Since investor satisfaction with portfolio performance is greatly impacted by market conditions, it is vital that advisors become proactive in assisting and guiding their clients to alleviate anxiety about an unpredictable market,” says Lubo Li, senior director of research at J.D. Powe.

“In fact, the importance of the advisor as a driver of overall satisfaction has increased considerably — up from 24% in 2007 to 36% in 2008 in the full-service segment,” Li adds.

For a third consecutive year, Edward Jones ranks highest among full-service investment institutions in Canada with a score of 758. Edward Jones performs particularly well in three of the six factors: investment performance; account set-up and account offerings; and convenience.

Berkshire Investment Group Inc. (752) and Wellington West Capital Inc. (747), respectively, follow in the rankings.

The study finds that investors who have high levels of satisfaction are contacted more often by their advisors and give their advisors more authority to make decisions. Highly satisfied investors report being contacted by their advisors an average of five times in the past 12 months, while investors with low levels of satisfaction report being contacted an average of only two times in the same period.

“Investors who have higher levels of satisfaction have more money invested with their primary financial institution, make more trades, and recommend their advisors and firms more often,” says Li.

The 2008 study is based on responses from 6,240 investors who use investment services with financial institutions in Canada. The study was fielded in May 2008.