Natixis poll shows almost universal trust in financial experts
Sentiment among Canada’s investors is high right now with more than 7 in 10 saying they feel financially secure compared to during the financial crisis.
However, the memories of the crash are still relatively fresh and in a new poll by Natixis, it’s clear that investors are more concerned about losing money than making gains.
That desire for safety over performance means that understanding risk beats tax planning as the leading concern among investors with 62% who have a financial advisor broadly comfortable with risk compared to 53% of self-directed investors.
Two thirds said they prefer an expert to help them make investment decisions with just 49% feeling confident to make decisions on their own.
Among those with advisors, 93% trust them at least somewhat. That easily beats those who trust financial institutions (72%); industry analysts (71%); close friends and family (68%); investment ratings and awards (63%); the financial media (56%); and social media (38%).
“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,” said Abe Goenka, CEO of Natixis Global Asset Management Canada.
So strong is the personal bond between investor and a trusted advisor that more than half of client would switch firm if their advisor did.
Fund managers need to do more
Fund managers are less trusted than financial advisors with 77% of investors wanting more transparency over fees and 76% saying fees are too high as managers are “really just tracking an index.”
Investors are evenly split on whether fund managers are open about their products’ limitations.
The survey identified five key things that financial advisors can do to make a difference:
1. Explain fees clearly;
2. Offer investments that reflect personal values;
3. Listen;
4. Help manage market volatility;
5. Help manage tax issues.
“Investors receive a constant barrage of information, but what they really need is clarity,” said David Goodsell, Executive Director of Natixis’ Durable Portfolio Construction Research Center. “Despite historically low volatility, investors still worry it will undermine their financial goals. And despite very high hopes for returns, they say they want safety over investment performance. Investors clearly need a financial professional to help them reconcile these conflicts and achieve their goals.”
However, the memories of the crash are still relatively fresh and in a new poll by Natixis, it’s clear that investors are more concerned about losing money than making gains.
That desire for safety over performance means that understanding risk beats tax planning as the leading concern among investors with 62% who have a financial advisor broadly comfortable with risk compared to 53% of self-directed investors.
Two thirds said they prefer an expert to help them make investment decisions with just 49% feeling confident to make decisions on their own.
Among those with advisors, 93% trust them at least somewhat. That easily beats those who trust financial institutions (72%); industry analysts (71%); close friends and family (68%); investment ratings and awards (63%); the financial media (56%); and social media (38%).
“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,” said Abe Goenka, CEO of Natixis Global Asset Management Canada.
So strong is the personal bond between investor and a trusted advisor that more than half of client would switch firm if their advisor did.
Fund managers need to do more
Fund managers are less trusted than financial advisors with 77% of investors wanting more transparency over fees and 76% saying fees are too high as managers are “really just tracking an index.”
Investors are evenly split on whether fund managers are open about their products’ limitations.
The survey identified five key things that financial advisors can do to make a difference:
1. Explain fees clearly;
2. Offer investments that reflect personal values;
3. Listen;
4. Help manage market volatility;
5. Help manage tax issues.
“Investors receive a constant barrage of information, but what they really need is clarity,” said David Goodsell, Executive Director of Natixis’ Durable Portfolio Construction Research Center. “Despite historically low volatility, investors still worry it will undermine their financial goals. And despite very high hopes for returns, they say they want safety over investment performance. Investors clearly need a financial professional to help them reconcile these conflicts and achieve their goals.”
