Financial advisors licensed with the Mutual Fund Dealers Association of Canada (MFDA) represent close to nine million households in Canada, or about 56% of all households, according to the results of the 2016 client research project from the self-regulatory organization (SRO).
Specifically, of the households that deal with MFDA representatives, about 83% fall within the mass-market space, defined as those with less than $100,000 in assets, while 15% are in the mid-market range ($100,000-$500,000) and 2% are affluent investors (more than $500,000).
These were some of the key findings from the MFDA’s client research project, which was announced early in 2016 and designed to produce a wide-ranging profile of mutual fund dealers’ client base.
The report’s “timely” arrival comes at a moment when the mutual fund industry is bracing for a potential ban on embedded fees — the impact of which has yet to come fully into view, says Mark Gordon, president and CEO of the MFDA, who presented the preliminary findings of client research project at the Federation of Mutual Dealers in Canada’s annual conference in Toronto.
The MFDA is aiming to explore the data collected in this project, which are based on the responses of all of its registrants, probing for trends that might offer guidance on which client segment, for example, stands to be most affected by the potential elimination of embedded commissions.
Read: The end of embedded commissions? How we got here
“We cannot predict the ultimate impact of the ban because there are too many variables. However, with these data, we can now, with some degree of confidence, identify those stakeholder groups that have the greatest chance of being impacted,” Gordon says. “We can also, to some extent, identify the potential scope of that impact on stakeholders.”
As part of the project, the MFDA mandated that registrants fill out clients’ information, including age, address, account type, product code, the market value of their investments, for example.
The MFDA can also use these data, Gordon says, to map areas in which there may be a concentration of higher-risk products and to produce an aggregate picture of different demographics.
The SRO plans to publish its report on this project sometime in the spring.
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