Investors are fine with trailer fees, survey says

Although financial advisors and investors in Canada may have similar views on the importance of global investment partnerships and comprehensive services — such as tax, retirement and estate planning — their viewpoints differ on socially responsible investing (SRI) and the nature of client/advisor relationships.

Those findings were revealed in Toronto-based Mackenzie Financial Corp.’s new 50 Insights report, which consists of 50 statistics from investors and advisors that considers where the two groups stand on key areas. The report’s release date, and inclusion of 50 data points, coincides with Mackenzie’s celebration of 50 years in business.

“As a firm that has operated in Canada for 50 years, we are always looking for insights that enable us to provide innovative investment solutions to help advisors and their clients succeed,” says Barry McInerney, Mackenzie’s president and CEO, in a statement. “These 50 new data points reinforced our perceptions and provide great learning for advisors as they strive to deliver exceptional service to investors.”

Advisors and investors see eye-to-eye, for the most part, when it comes to whether asset-management companies should develop experience in global investing.

Specifically, 75% of advisors believe it’s important to work with asset-management companies that have developed global investment partnerships and 72% of investors say its important for asset-management companies to develop unique experience in global investing. That figure increases to 84% among high net-worth Canadians with more than $500,000 in investible assets.

Similarly, 92% of advisors believe comprehensive services such as tax, retirement and estate planning are important for clients. The perspective is matched by investors who say, “one of the keys to a strong advisor-client relationship is the advisor’s ability to offer services for tax, retirement and estate planning,” the report says.

However, advisors and investors differ on their perceive relevance of SRI as 91% of investors predict their reliance on SRI will remain the same or increase in the next two to three years. In contrast, only 35% of advisors say SRI will be a growing part of their practices in the next two to three years.

Another difference of note between advisors and investors was that 90% of investors say their relationships with their advisors is strictly business while only 63% of advisors believe their relationship to clients is purely business.

Other key findings of the report include:

> More than half of investors (57%) are interested in engaging with their advisors on social media. Among millennial investors, 52% say it’s important for advisors to be accessible via text messaging, Facebook, Twitter and LinkedIn. Approximately (49%) of advisors believe clients want them available on these channels.

> More than nine in 10 advisors (92%) believe sharing articles and other relevant information is important for investors. In contrast, just more than two-thirds (68%) of investors believe receiving shared articles is important.

> Approximately 35% of women are likely to refer their advisor to others compared to 27% of men.

The surveys were completed by Environics Research Group with supporting data from PMG Intelligence. Environics surveyed 412 Canadian advisors between June 20 and July 12. A separate survey of 1,247 Canadians ages 18 to 75, with an investment portfolio or plans to invest in the near future, was conducted between June 27 and July 11. The PMG Intelligence research study was conducted with 1,184 Canadians holding $10,000 or more in investable assets.

More advisor and investor statistics can be found on the report’s website.

Photo copyright: wavebreakmediamicro/123RF