Canadians are less satisfied with their investment firms following a year of negative yields, according to a report from J.D. Power released on Monday.
The J.D. Power 2019 Canada Full Service Investor Satisfaction Study saw customer satisfaction with investment firms drop for the first time since the financial crisis of 2008, falling to 778 (on a 1,000-point scale) in 2019 compared to 785 in 2018.
The report found that almost one-third (32%) of investors said their advisors didn’t take the time to explain their portfolio performance during the past year. According to J.D. Power, investors who don’t receive an explanation on portfolio performance from their advisors are almost twice as likely to say their financial performance was “worse than expected” as those who do (36%, compared to 19%, respectively).
“There’s a belief in the industry that challenging market conditions are when financial advisors most demonstrate their value to clients,” Mike Foy, J.D. Power’s senior director of wealth intelligence, said in a release. “But what we see is that many advisors are not consistently having the sometimes difficult conversations necessary to manage client expectations and navigate through market volatility and downturns.”
Customer satisfaction was lowest with affluent investors with more than $500,000 in assets, dropping by 38 points year over year. Twenty-eight per cent of affluent investors said performance was “worse than expected,” and 16% said they intended to decrease their investments over the next 12 months.
Sixteen per cent of boomers and pre-boomers (born before 1946) said they were “worse off,” up from 9% in 2018, and 8% of millennials and gen-X investors said they were “worse off,” up from 6% last year.
For the seventh consecutive year, Edward Jones ranked highest in customer satisfaction with a score of 807, followed by Assante with 796. BMO Nesbitt Burns, CIBC Wood Gundy and Raymond James all tied for third with 784.
Read the full report here.