Annual survey of fund investors reveals disparity in use of advisors, tendency to act on performance statements
The Investment Funds Institute of Canada (IFIC) has released the results of its latest Canadian Mutual Fund and ETF Investor Survey.
Building on last year’s findings, the 2020 poll conducted by Pollara obtained responses from more than 1,000 mutual-fund investors as well as 500 ETF investors across Canada.
Mutual-fund investors reportedly continued to use advisors for the majority of their purchases, though that use has declined for the second year in a row. ETF investors, on the other hand, were less likely to rely on advisors, as their purchases were split nearly evenly between advisors and online brokerages.
Levels of satisfaction with advisors were similarly high for mutual-fund and ETF investors. Aside from saying that their advisor instils good saving and investment habits in them, investors in mutual funds reportedly continued to see the value in their advisors and do not want to make their own investment decisions.
“While fewer than half of ETF investors used advisors for their last purchase, those who did agree with these sentiments,” the report said.
While advisors have been more likely to discuss fees with the investors they work with since the advent of CRM2 in 2017, this year saw a slight decline in reported discussion of fees among advised investors, indicating a plateauing of the upward trend.
Aside from reporting similar frequencies of fee conversations, both ETF investors and mutual-fund investors with advisors expressed confidence in the knowledge of fees that they pay to their advisors. But while mutual-fund investors rely mainly on advisors and statements for information about fees, ETF investors were more reliant on information from other sources.
“While still a minority, the likelihood of investors taking action due to information contained in the statements has increased slightly since last year,” the report said, noting a steady and significant in that number since 2017.
ETF investors were reportedly more likely to take action based on information in statements. For both groups of investors, the most common action was to discuss new investments or fees with their advisor.
The survey also looked at where investors stand on responsible and impact investing. While most respondents said they were aware of responsible investment products, the survey showed their knowledge of such products was relatively low – ETF investors were more knowledgeable on the products – and most fund investors had no responsible investments in their portfolio.
Rather than having advisors as their main information sources, investors who were knowledgeable about responsible investments did their own research. Only a quarter of investors have reported discussing these investments with their advisors, although the majority of investors overall said they would appreciate it if their financial institutions or advisors were to bring them up in discussions.
“Overall, investors are positive about responsible investments and anticipate including or expanding portfolios in the next few years to include them,” the report said, noting that mutual-fund investors tend to be more optimistic than ETF investors on aspects like the positive impacts of those investments in the world as well as their potential for positive returns.
