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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.

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