A new survey highlights a disturbing trend for Canadian advisors
Retail investors’ trust in the financial services industry in Canada fell 12 per cent since 2013, according to a new study by the CFA Institute.
Despite the drop, that trust in Canada is still higher than that in the U.S., U.K. and Australia, which has increased since 2013.
Investors are expecting higher levels of transparency than ever before, holding their investment managers to the highest ethical standards, and are laser-focused on returns, according to the survey, From Trust to Loyalty: A Global Survey of What Investors Want.
“Investor demands have become significantly more dynamic,” said Paul Smith, CFA, president and CEO of CFA Institute. “Along with delivering performance, investment professionals must also provide transparency around fees and investment decisions, align their interests with their clients’, and provide robust data security measures. Those investment firms that do strike this balance will engender greater trust among investors which, in turn, will drive growth.”
Despite the concerns the survey found that over the next three years, 81% of Canadian investors will still prefer having a person guide them to using the latest robo-advisor technology. The U.S. (73%) and the U.K. (69%) also value the guidance of an investment professional.
But that’s a far cry from the developing world where the majority of retail investors in India (64%) and China (55%) and half of investors in Singapore believe having access to the latest tech platforms and tools will be most important to executing their investment strategy. Sixty-eight percent of retail investors in India and 56% in China consider brand to be more important than people when it comes to trust.
“While an increase in overall trust in the financial services industry is a net positive for financial professionals,” continued Smith, “performance is no longer the only ‘deal breaker’ for investors. They are continuing to demand more clarity and service from financial professionals and, with the rise of robo-advisors, they have more alternatives than ever before. Further, if investment professionals don’t provide this clarity, then regulators may force them to, for better or worse.”
Despite the drop, that trust in Canada is still higher than that in the U.S., U.K. and Australia, which has increased since 2013.
Investors are expecting higher levels of transparency than ever before, holding their investment managers to the highest ethical standards, and are laser-focused on returns, according to the survey, From Trust to Loyalty: A Global Survey of What Investors Want.
“Investor demands have become significantly more dynamic,” said Paul Smith, CFA, president and CEO of CFA Institute. “Along with delivering performance, investment professionals must also provide transparency around fees and investment decisions, align their interests with their clients’, and provide robust data security measures. Those investment firms that do strike this balance will engender greater trust among investors which, in turn, will drive growth.”
Despite the concerns the survey found that over the next three years, 81% of Canadian investors will still prefer having a person guide them to using the latest robo-advisor technology. The U.S. (73%) and the U.K. (69%) also value the guidance of an investment professional.
But that’s a far cry from the developing world where the majority of retail investors in India (64%) and China (55%) and half of investors in Singapore believe having access to the latest tech platforms and tools will be most important to executing their investment strategy. Sixty-eight percent of retail investors in India and 56% in China consider brand to be more important than people when it comes to trust.
“While an increase in overall trust in the financial services industry is a net positive for financial professionals,” continued Smith, “performance is no longer the only ‘deal breaker’ for investors. They are continuing to demand more clarity and service from financial professionals and, with the rise of robo-advisors, they have more alternatives than ever before. Further, if investment professionals don’t provide this clarity, then regulators may force them to, for better or worse.”
