Despite massive swings in stock markets and the economy, a new survey from PricewaterhouseCoopers (PwC) shows that 73% of Canadians who own mutual funds believe they remain a good investment vehicle.

Furthermore, 75% trust their financial advisor and 73% feel that their financial advisor is competent and has done a good job over the years.

The survey of 867 Canadians invested in mutual funds was conducted by Leger Marketing in March 2009 and found that 73% of investors felt they have enough investment choices as far as mutual funds are concerned.

A further 65% of investors are confident that their financial advisor takes their interests into account when selecting a portfolio for them.

Only 23% believe that they would be better served by directly investing in mutual funds without the advice of a financial advisor.

“Investment products are generally complex, especially given the myriad of offerings and providers from which to choose,” says Raj Kothari, leader of the PwC Canada investment management practice. “Investors today are forced to make sense of the daily barrage of conflicting messages. It’s no wonder the value of advice is crucial to investors.”

Kothari continues, “In a climate of failed companies, corporate scandals, government bailouts, staff redundancies and decreased corporate profits, it is easy to understand how investors can lose confidence in the markets.”

Indeed, the survey revealed a conservative optimism with 38% of mutual fund investors believing their investment portfolio will improve within the next two years. Others were less optimistic with only 23% believing that their portfolio will improve in the next three years and only 27% in the next five.

When asked to rank fund choices in terms of how important each of them would be in helping them meet their retirement needs, balanced funds, guaranteed products, and fixed income funds were more often among respondents’ top three picks as opposed to equity mutual funds.

Nearly three-in-10 were unsure how their retirement needs would best be met — especially those with a college education or less, those who have not yet invested in mutual funds, and women. As age and income increase, however, the likelihood that a respondent will be unsure steadily decreases.

“In our analysis, it became quite apparent that age, income, and to a lesser extent education and marital status, all play a role in terms of which options respondents believe are best-suited to meet their retirement needs,” notes Kothari.

“For instance, those more likely to choose balanced funds first include those who are, 35 years of age or older, with a university education (vs. those with a college education or less), already invested in mutual funds, making $80,000 + per year, and men. Also, as one’s income increases, so too does the likelihood that they will place balanced funds among their top three choices.”

IE