When choosing a financial advisor, Canadians look for someone who is honest, knowledgeable, and able to explain things in easy-to-understand terms, according to a recent survey by BMO Nesbitt Burns.
In the survey of 600 adults, conducted by Pollara in late June and early July, 69% of respondents said they have used the services of a financial or investment advisor within the past 12 months.
Respondents said that when seeking an advisor, the top attributes they look for include:
- Trustworthiness and honesty (89%)
- Level of knowledge (88%)
- Experience (83%)
- Track record (76%)
- Availability (76%)
- Reputation (75%)
- Advisor confidence level (75%)
In addition, 82% of respondents said they want an investment advisor who will explain their investments in easy-to-understand terms. And, 69% said it is very important that their advisor engages in meaningful communication on a regular basis.
Interestingly, the study also found that investors are less interested in returns that outperform the markets than returns that meet their financial plan’s targets.
“It’s encouraging that Canadians appreciate the importance of having the performance of their investments track to their overall financial plan,” said Bill Brown, senior vice president and managing director at BMO Nesbitt Burns. “However, they are also seeking to play a more active role in managing their portfolios by better understanding the markets.”
Advisors should take these results into account when working with clients, Brown said. Specifically, he suggests showing an interest in a client’s specific life situation, and extending the wealth management conversation beyond investments to things that matter to the client, such as insurance, estate planning and education savings.
“Advisors can set themselves up for success by engaging their clients in meaningful conversation and taking the time to explain the market forces at play and how they affect investing,” he said.
Also, Brown urges advisors to keep in regular contact with clients through portfolio reviews, phone calls and face-to-face meetings, remaining focused on the client’s overall financial plan along the way.