IFIC study reveals insights into Canadian mutual fund and ETF investors
The value that financial advisors bring to investors in Canadian investment funds is highlighted in a new study from the Investment Funds Institute of Canada, published today (Oct. 22).
Almost 6,000 investors were polled by Pollara Strategic Insights including 4,077 who invest in mutual funds and 1,523 ETF investors with some crossover between the two groups. The survey aimed to discover the behaviours and views of investors and identify their concerns and preferences and found that 61% of Canadian investors own mutual funds and 24% own ETFs.
Financial advisors come out of the poll well with 94% of respondents expressing satisfaction, up three points from 2023, while 92% said they trust their advisor, a new question for 2024.
The share of investors who said they have more confidence in reaching their investment goals when working with an advisor was 87%, up from 85% in 2023, while 86% said they believe they get a better return on their investment from working with an advisor, up three points from last year. Advisors also score highly for helping investors stay disciplined during downturns and improving their savings habits.
Advisors are also considered to be worth their fees by eight in ten respondents, although only 67% of respondents said they understand the fees they pay to advisors and dealer firms including management expense ratios.
But not all investors are using advisors, with 78% of those who hold mutual funds having purchased at least some with advice and 72% having used advice when buying their most recent mutual fund investment. This compares to 56% and 48% respectively for ETF investors.
Of all Canadians with any kind of investments, 71% use an advisor for at least some of their investments, while 39% use an advisor for all their investments.
Asked about DIY investing, 46% of respondents have invested directly. This is more common among ETF investors with 68% saying they do so at least occasionally and one third doing so regularly. This compares to just 41% and 16% respectively among mutual fund investors.
Investment confidence
The Canadian Mutual Fund and Exchange-Traded Fund Investor Survey also asked about the funds themselves to assess investors’ confidence and views.
Most investors who took part in the study have not bought mutual funds in the past two years (42% have including 24% in the past year) while 62% of ETF investors have done so in the past two years including 41% in the past year.
Those who have invested in the past year are more likely to be younger and knowledgeable about investing, with men more likely to have bought mutual funds than women while the gender split is similar for ETFs. Almost nine in ten investors say they are knowledgeable about mutual funds and ETFs.
Confidence in investment products is higher this year, with 92% of mutual fund investors and 88% of ETF investors confident that their investment funds will help them meet their financial goals. This compares with 75% of stock investors, 81% of those holding GICs and 87% owning their primary residence.
“The annual Pollara survey provides valuable insights into investors’ needs, preferences and concerns about their savings goals. These insights help the industry adapt and make decisions that will truly benefit investors,” said Andy Mitchell, President and CEO, IFIC. “It is encouraging to see that investors are highly satisfied with investment funds and place strong value in the advisor relationship.”
