Asking for referrals: pick up the phone

Trust in financial advisors runs high among investors, according to Natixis Global Asset Management’s 2017 Individual Investor Survey.

In fact, 93% of investors surveyed for the report trust their own advisors when making investment decisions, while 80% of investors put trust in advisors in general. This is good news for advisors, especially if they switch firms, as 51% investors surveyed said they would follow their advisor if they joined another financial services institution.

Meanwhile, 72% of investors surveyed said they trust financial services firms for investment advice, followed closely by industry experts or analysts at 71%, and close friends, family and co-workers at 68%. In contrast, investors are least likely to go to social media for advice on investment decisions as only 38% of investors put their trust in online channels.

“Wary of the markets and swamped by information from numerous sources that can be hard to digest, today’s investors want forthright, actionable advice and guidance from trustworthy sources to aid them in their financial decision-making,” says Abe Goenka, CEO of Natixis Global Asset Management Canada, in a statement.

When looking for an advisor, most investors rely on referrals from friends, relatives or colleagues (34%). Otherwise, investors look to advice from other professionals, such as a lawyer (23%), an Internet search (7%), an advisor in their family or social circle (7%), an advisor who has contacted them (7%) and social media (6%).

Another key factor for investors when selecting an advisor is how much the advice will cost. Specifically, 50% of investors said fees matter most when deciding on an advisor. Referrals from friends and family were secondary (47%), followed by an advisor’s education and credentials (43%) and the size and reputation of the advisor’s firm (39%). Investors are less concerned with access to unique investment opportunities (20%).

Despite strong faith in advisors’ investment expertise, investors still wish their advisors would do more of the following, in order of importance:

  • Give a clear explanation of fees
  • Provide investments that reflect personal values
  • Listen
  • Help manage market volatility
  • Help with tax issues
  • Help discuss financial planning with family members
  • Discuss charitable giving and philanthropic goals
  • Talk about estate planning

Natixis surveyed 300 Canadian investors with a minimum of $123,661 in investible assets as part of the global study of 8,300 investors in 22 countries this past February.

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