New study to focus on value of advice

IIAC partners with Advisor Impact

By: Clare O’Hara
September 19, 2012 October 30, 2019
23:00

THE INVESTMENT INDUSTRY Association of Canada (IIAC) is partnering with Advisor Impact Inc., both based in Toronto, to conduct a study to determine what clients value most in their financial advisory relationships.

“The increasing demand for value is impacting our industry,” says Ian Russell, the IIAC’s president and CEO. “Today, there is a growing sophistication among clients of financial services. They are much more value-conscious, demand higher levels of service and are looking for longer-term relationships. We hope that we will be able to provide advisors with insight into how they can drive much deeper client relationships.”

The study will be carried out during October and will survey 1,200 clients _ all of whom are working with a financial advisor. The IIAC says the survey will provide financial services firms with information about client/advisor relationships that will allow the firms to develop tactics and strategies to compete more effectively.

“The goal, in a nutshell, is to define, understand and measure client engagement,” says Julie Littlechild, CEO and founder of Advisor Impact. “We hope to help advisors understand what is driving their deepest and most profitable relationships and what they can do to ensure that they are delivering an outstanding client experience.”

In November 2011, the Toronto-based Investment Funds Institute of Canada (IFIC) had released a similar report that looked at the value of advice and what relationships with advisors can mean for investors. IFIC’s report focused 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 client/advisor relationship.

Says Joanne De Laurentiis, IFIC’s president and CEO: “One of the key findings shows that advised households, compared with non-advised households, save more wealth overall, are more likely to have money in tax-advantaged programs and have a higher level of financial literacy. As well, they are more comfortable with the state of their finances upon retirement. That shows the advisor is playing a key role when it comes to education and the discipline of saving.”

The IFIC study also found that the use of financial advice is not limited only to wealthy individuals. In fact, most investors first start working with an advisor when they have only modest amounts to invest. Thus, most investors first seek advice in order to start investing and grow their assets.

The IIAC/Advisor Impact survey, Littlechild says, will expand beyond the mutual fund sector as well as try to understand what drives client/advisor relationships and what advisors can do to effect positive change.