Canadian investors feel confident in the level of service and professionalism offered by their own advisors but remain wary of the financial services industry, according to a recently released study commissioned by the Toronto-based Investment Industry Association of Canada (IIAC).
The study, released on Thursday, is called The Economics of Loyalty and was conducted by Toronto-based Advisor Impact Inc. The study consists of over 1,000 online surveys completed by Canadians currently working with a financial advisor and making or contributing to financial decisions for their household.
While speaking to members of the Empire Club of Canada in Toronto, Ian Russell, president and CEO, IIAC, said the study was meant to find out what clients value and expect in their financial advisor relationships.
During his keynote speech, Russell highlighted four key findings from the survey:
- Most investors feel their advisors create value. Of those people surveyed, over 60% said they feel they receive a high level of value from their advisor.
- Clients feel that they are in control of their financial future. According to the survey, more than five out of six clients are confident about reaching their financial goals.
- Clients trust their advisor. Five out of six investors surveyed said they feel a high level of trust in their financial advisor, while 75% said they trusted the advisor’s firm.
- Clients believe that they have a strong and engaged relationship with an advisor when he or she does the following: seeks input from the client and incorporates it into investment advice; works with family members in multi-generational planning; actively conducts financial and estate planning.
To foster client engagement the IIAC intends to partner with Advisor Impact, said Russell, to educate advisors on how they can build those stronger relationships. One way the IIAC will do this is through webinars conducted by Advisor Impact, he said, which will be available to members through the association’s website.
However, while many Canadian investors feel they have a strong and engaged relationship with their advisors, they are less impressed with the financial services industry. According to the study, only 32% of investors trust the investment industry as a whole. Russell attributes this wariness to the difference between first-hand experience and second-hand information.
“When it comes to assessing their own advisor and their own advisor’s firm, investors base their opinion on personal experience,” he said. “But when they are asked to rate the industry as a whole, they fall back on the only reference points they have – the news media, the Internet, and other sources of second-hand information.”