Advisor relationships and investor decision-making study
The Investor Education Fund recently released a study that examined the relationships between individual Canadian investors and their financial advisors.
A few of the interesting, and somewhat astonishing, results are;
- Two-thirds of investors know little about their advisor when they enter into a relationship with that advisor.
- Only one-third gets to an advisor through a referral.
- The most common way to get an advisor is to have one assigned by a bank or financial institution.
- Investors trust this assigned advisor, because they trust their financial institution to do what is best for them.
- 7 out of 10 investors believe their advisor has a legal duty to put the client's best interests ahead of their own or those of the financial institution.
- Most believe the advisor will recommend what is best for the client even at the expense of their own commission.
- Investors have little or no idea about how advisors can get paid. Only 33% of investors typically recognize several common arrangements for payment.
The study is interesting and insightful as it explores the advisor-client relationship is great detail.
To read the study, click Investor Education Fund Study - Advisor Relationships.