Financial advisors and their clients. It is an awkward relationship because it is on-going, there is, presumably a difference in knowledge, and because we want to trust and feel like we have made the right choice. While recent Canadian changes in fee disclosure rules are part of a set of changes designed to help consumers make better choices, the high level of satisfaction with financial advisors may mitigate the impact.
An online survey conducted by Environics for Hennick Wealth Management shows that consumers are generally pleased with their financial advisor. Financial advisors do the best on being approachable (50% strongly agree) and their expertise is widely acknowledged (49%).
After these top two, the next four items have somewhat fewer who agree strongly but the top 2 box is still high. Several things are worth noting. First, trust to act in my best interests is high but only 37% feel strongly. Second, many believe they get the same level of service as someone who has 10X as much to invest. While this would be great if it is true, one expects that many investors do not realize the gap.
Finally, it is interesting that value for fees I pay is one of the least positive attributes. Only 29% strongly agree that their advisor provides value for the fees. This is interesting and might produce churn except for the fact that advisors are so approachable and knowledgeable.
As robo-advisors and self-serve models continue to make the case of lower fees and other benefits of ditching financial advisors, the survey results suggest that while fees and value are likely to be key drivers, the personal touch and the confidence that the investor knows more are important. Disruption in the industry abounds but consumers do not hold a negative outlook.
About the Study: The online survey was conducted by the Environics Research Group from August 26th to 31st, 2017. A total of 1030 Canadians were interviewed (368 are currently working with a financial advisor).