Advisors are the key influence on investors’ decision-making, according to a new study released Thursday by Investor Education Fund.
The study provides insight into the learning needs of Canadian investors who have an advisory relationship, including factors that influence investment decisions, how people work with advisors to make decisions and investor expectations of their advisors.
The study found that Canadian investors most commonly look to their advisors for advice on asset mix, planning and specific types of investments to buy. It found that investors’ trust in their advisors’ opinions dominates all other factors in the decision to buy investments.
In addition, the study revealed that investor knowledge of fees and what affects them is weak, and investors are unaware of potential conflicts of interest. Most investors are not aware of what products their advisors are licensed or registered to sell.
“Investors need to do more to understand how their advisor impacts their investment choices and, ultimately, their returns,” says Tom Hamza, president of IEF. “This study emphasizes the need for Canadian investors to get clarity about the nature of their advisory relationships and to closely match their needs with the skills and capabilities of their advisor.”
The online IEF study of 2,000 Canadian investors divided the issues into two distinct surveys — advisor relationships and investor decision-making — and each survey had approximately 2,000 online respondents.
A copy of Investor Behaviour and Beliefs: Advisor Relationships and Investor Decision-Making is available online at www.GetSmarterAboutMoney.ca.