The Investment Funds Institute of Canada Wednesday released is second report on the value of advice.
IFIC says the 2011 report provides additional evidence supporting the value of advice and what a relationship with an advisor can mean for investors.
The report answers the question of whether investors accumulated wealth before they sought out advice. According to the report, most investors first begin to work with an advisor with only modest amounts to invest – typically less than $25,000 – and at relatively young ages. The research shows that the use of advice is not limited only to wealthy individuals, and that most investors first seek advice in order to start investing and grow their assets.
“The mutual fund industry provides Canadians’ access to capital markets with even small amounts of investable assets,” says Joanne De Laurentiis, IFIC president and CEO. “With the valuable assistance of an advisor, those small amounts compounded over time can grow into a substantial investment portfolio.”
The 2011 report builds on the 2010 report by focusing in particular on three areas: the link between receiving advice and wealth accumulation; the investment plan and how it pays off; and a more detailed look at the value components of the advisor-client relationship.
The findings highlight some of the yield advantages of advised portfolios, which, when compounded over a working lifetime, explain the larger investment portfolios of advised investors relative to non-advised investors.
IFIC says the report underscores the importance of advice as a key contributor to Canadians’ financial health and “a cornerstone of the current retail financial market”.
It adds that “the importance of preserving a healthy advice industry should not be overlooked” as regulators consider policy reforms affecting the financial sector.
The 2011 value of advice report is available on the IFIC website.