Table of Contents
Overview
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- Regional classifications
- Income
Executive Summary
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- The issues
- Less than half of Canadians have used a financial advisor
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- Figure 1: Use of financial advisor, October 2018
- Lack of sufficient assets is the main reason cited by non-users
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- Figure 2: Reasons for not using a financial advisor, October 2018
- Around three in four clients cite retirement planning as the primary reason for usage
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- Figure 3: General attitudes towards advisors, October 2018
- Men and younger clients have a higher attrition rate
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- Figure 4: “I have switched advisors in the past due to the performance of my portfolio” (% agree), by age and gender, October 2018
- Majority of Canadians uncertain how to evaluate quality of advice
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- Figure 5: General attitudes towards financial advice, October 2018
- The opportunities
- Younger Canadians may need more convincing about financial advice
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- Figure 6: Select attitudinal statements related to value perception (% any agree), 18-44s vs over-45s, October 2018
- Robo-advisors may impact existing advisory business models
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- Figure 7: Select general attitudes towards financial advice (% any agree), 18-44s vs over-45s, October 2018
- Younger clients have more technical knowledge but are more inhibited
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- Figure 8: Select attitudes towards financial advice (% agree), 18-44 vs over-45s, October 2018
- Most believe that advisors should do more to market themselves
- What it means
The Market – What You Need to Know
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- Canada’s population is aging
- Diminished capacity among seniors a consequence of aging population
- Ontario government eyeing more oversight of financial planners
- MFDA issues update on total cost reporting
- DSC ban, multiple conduct changes coming from CSA
- Financial education courses specializing in the elderly would help advisors
Market Factors
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- Canada’s population is aging
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- Figure 9: Population aged 0-14 and 65+, as of July 1, 1995-2035*
- Diminished capacity among seniors a consequence of aging population
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- Figure 10: Canadian population, by age, 2016
- Financial education courses specializing in the elderly would help advisors
- Ontario government eyeing more oversight of financial planners
- MFDA issues update on total cost reporting
- DSC ban, multiple conduct changes coming from CSA
- Know Your Client
- Know Your Product
- Suitability
- Conflicts of interest
- Relationship disclosure information
Key Players – What You Need to Know
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- HSBC launches foray into digital advisors in Canada
- Wealthsimple to launch mutual-fund investment firm with in-house advisors
- RBC’s new robo platform aimed at digitally-savvy clients
- CIBC becomes the last of the major banks to launch its own ETFs
- Allianz stepping into the Canadian fixed-income ETF market
- New partnership gives mutual-fund dealers in Canada greater access to ETFs
- Fidelity collaborates with Amazon to develop a digital financial advisor accessible via a virtual reality headset
Innovations & Industry Developments
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- Wealthsimple to launch mutual-fund investment firm with in-house advisors
- HSBC launches foray into digital advisors in Canada
- RBC’s new robo platform aimed at digitally-savvy clients
- Questrade slashes fees on robo-advisory service
- CIBC becomes the last of the major banks to launch its own ETFs
- Allianz stepping into the Canadian fixed-income ETF market
- High-net-worth investors now able to hold bitcoin fund in registered accounts
- New partnership gives mutual-fund dealers in Canada greater access to ETFs
- Fidelity collaborates with Amazon to develop a digital financial advisor accessible via a virtual reality headset
Marketing Initiatives
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- Investors Group rebrands to better reflect its value proposition
- TD to revamp its discount brokerage firm
The Consumer – What You Need to Know
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- Less than half of Canadians have used a financial advisor
- Lack of sufficient assets is the main reason cited by non-users
- Cost, in-person advice and reputation are the top choice factors
- Most advisors explain portfolio performance
- Men and younger clients have a higher attrition rate
- Majority believe that advisors are a motivating force to save more
- Around three in four clients cite retirement planning as the primary reason for usage
Use of Financial Advisors
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- Less than half of Canadians have used a financial advisor
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- Figure 11: Use of financial advisor, October 2018
- Older Canadians have higher usage
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- Figure 12: Use of financial advisor, by age, October 2018
- Bank advisors most commonly used
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- Figure 13: Type of financial advisor used, October 2018
- Rise of family offices in Canada
- Older clients prefer independent advisors
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- Figure 14: Type of financial advisor used (select), 18-44s vs over-45s, October 2018
Reasons for Not Using an Advisor
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- Lack of sufficient assets is the main reason cited by non-users
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- Figure 15: Reasons for not using a financial advisor, October 2018
- Fees are also a significant barrier
- Older non-users more likely to self-manage investments
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- Figure 16: Reasons for not using a financial advisor (select), 18-44s vs over-45s, October 2018
- Perception of bias cited by almost one in four over-45s
- Value-add perceptions and trust are other barriers to usage
- Women non-users more likely to cite insufficient assets while men are more likely to self-manage investments
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- Figure 17: Reasons for not using a financial advisor (select), by gender, October 2018
Choice Factors
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- Cost, in-person advice and reputation are the top choice factors …
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- Figure 18: Choice factors when choosing a financial advisor, October 2018
- … but cost matters less to advised clients
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- Figure 19: Choice factors when choosing a financial advisor (select), users vs non-users, October 2018
- Older Canadians have stronger preferences when looking for an advisor
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- Figure 20: Choice factors when choosing a financial advisor (select), 18-44s vs over-45s, October 2018
- TURF Analysis
- Methodology
- Cost and face-to-face meetings matter to nearly three in four consumers
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- Figure 21: TURF analysis – Choice factors, October 2018
Awareness of Financial Advice
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- Most advisors explain portfolio performance
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- Figure 22: Attitudes towards financial advice, October 2018
- Younger clients have more technical knowledge but are more inhibited
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- Figure 23: Select attitudes towards financial advice (% agree), 18-44s vs over-45s, October 2018
- Female advised clients are less aware of technicalities
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- Figure 24: Select attitudes towards financial advice (% agree), by gender, October 2018
Value Perception
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- Around three in four clients cite retirement planning as the primary reason for usage
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- Figure 25: General attitudes towards advisors, October 2018
- Men and younger clients have a higher attrition rate
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- Figure 26: “I have switched advisors in the past due to the performance of my portfolio” (% agree), by age and gender, October 2018
- Majority believe that advisors are a motivating force to save more
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- Figure 27: Attitudes related to value perception about financial advice, October 2018
- Younger Canadians may need more convincing …
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- Figure 28: Select attitudinal statement related to value perception (% any agree), 18-44s vs over-45s, October 2018
- … while advised clients are more strongly convinced about their value
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- Figure 29: Attitudinal statements related to value perception, advised clients vs non-users, October 2018
- Four in five clients feel they are better off as a result of financial advice
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- Figure 30: Attitudes related to value of advisors, October 2018
- Most believe that advisors should do more to market themselves
General Attitudes towards Financial Advice
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- Majority of Canadians uncertain how to evaluate quality of advice
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- Figure 31: General attitudes towards financial advice, October 2018
- Only a minority understand advisor compensation
- Women less keen on making their own financial decisions
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- Figure 32: Select general attitudes towards financial advice (% any agree), by gender, October 2018
- Three in 10 18-44s positive on robo-advisors
- Robo-advisors many impact existing advisory business models
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- Figure 33: Select general attitudes towards financial advice (% any agree), 18-44s vs over-45s, October 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Abbreviations and terms
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