Encouraging clients to do a little homework on their own could lead to stronger and more engaged advisor-client relationships, according to research by the Toronto-based Investment Education Fund (IEF) released on Thursday.
The Insights on Canadians and online investor education report surveyed more than 1,000 visitors to the IEF’s website GetSmarterAboutMoney.ca. Results from the survey found that 79% of visitors said they would ask their advisors better questions as a result of what they had learned on the site.
This is good news for advisors, according to Tom Hamza, president of the IEF, because when clients ask informed questions the advisor is able to have a deeper conversation with them, which in turn builds trust. Says Hamza: “It’s kind of the advisor’s dream.”
As well, when clients watch a short video or read an article either on their own time or at a meeting it saves the advisor time and resources. “[The advisor is] not spending 45 minutes explaining the ins and outs of compound interest,” says Hamza. “[Instead] they’re sending people to a compound interest calculator.”
In addition to asking more questions, 78% of respondents said they would try to learn more about investing while 69% said they would start or update a financial plan.
Websites such as IEF’s do not replace an advisor, however. According to the survey, 32% of respondents said a financial advisor was their top source of investment advice. Twenty-seven percent said the media was their number one source while another 10% relied on family members.
Even when a trusted source of information, Hamza believes that advisors who point individuals in the direction of third-party resources appear confident about their own advice and that they put their clients first.
“[Taking] a proactive approach to this is a great way to ensure that your clients best interests are being looked after,” says Hamza.
The research results are based on 1,000 surveys conducted through the getsmarteraboutmoney.ca website in 2014.