Dollars & Sense 2009

The Advisor Group’s eighth annual Dollars & Sense survey of advisors and clients provides precious insights into what clients want from their advisors; and in turn, what advisors need in order to fulfill those expectations.

One thing’s clear from the survey: despite tough economic times, clients aren’t ready to give up on advice, and advisors across the country feel confident their clients are in it for the long haul.

When it comes to how advisors are actually imparting advice, TFSAs figured prominently this year. Across all three segments of client demographics — accumulation phase, transition phase, and retirement — advisors were consistently recommending their clients contribute to these vehicles.

Only one in five advisors recommended ETFs to clients in the accumulation phase, while even fewer, 16% and 13% respectively, recommended this growing product class for clients in the transitional phase and retirement. Guaranteed Minimum Withdrawal Benefit products (GMWBs) do have substantial uptake in the transitional and retirement phases, with 35% and 41% of advisors recommending them to people in those respective phases.

On the insurance side, term is king with 73% of advisors recommending a term insurance policy to clients in the accumulation phase. In comparison only 39% of advisors are frequently recommending universal life policies (39%) and even fewer are suggesting whole life (34%).

When asked what they need to better serve their clients, advisors placed income generation on top. One in four advisors identified “more products tailored to income generation” as their top product priority to better to serve client needs. Nearly two-thirds of advisors (64%) put better income generating products in their top three priorities.

Following close behind, in terms of identified importance, were more products tailored to capital preservation, 22% of advisors listed it as their top product wish, and 61% listed it in their top three priorities.

We thank Invesco Trimark for its sponsorship of this year’s Dollars & Sense research.

Stories

Client needs dictate investment choices By Philip Porado, Kanupriya Vashisht It’s different for every client. Respondents at our 2009 Dollars & Sense roundtable discussion say client response to investment products is all over the map, although there’s still some favour shown to capital preservation – at least for now.

Get used to busybody clients By Philip Porado As the economy recovers, one challenge will be to keep client greed under control, and work through the process of how best to collaborate on investment decisions.

Additional services bring advisors more business By Kanupriya Vashisht Ancillary services build client loyalty, and advisors can do a better job of making investors aware of things like tax planning and preparation, accounting services, and legal assistance that’s available within their own offices or through affiliates.

Advisors must find client stress points By Staff Where do clients feel the financial pinch? Here’s what our 2009 Dollars & Sense roundtable participants had to say.

Some clients are changing retirement plans By Philip Porado Many investors say they stay in the workforce longer; some are adjusting spending projections for retirement; and others who have retired may be returning to work. Those decisions could change the way you manage their wealth.

Methodology

Investor study: Conducted on-line with 1,537 adult Canadians who report having a financial advisor between October 29th and November 3rd, 2009. The margin of error for a sample of this size is +/-2.5%, 19 times out of 20.

Advisor study: Conducted on-line with 1,063 Canadian financial advisors between October 23rd and November 4th, 2009. The margin of error for a sample of this size is +/-3.0%, 19 times out of 20.

This year’s participants included: Kathleen Peace, CFA, CFP, Bennett March of IPC Investment Corp., Toronto; Doug Gleed, VP & Regional Sales Manager, Invesco Trimark; Donna Kerry, Publisher,Advisor Group; Nicole St. Denis, Investment Associate, ScotiaMcLeod, London, Ont.; Philip Porado, Executive Editor, Advisor Group; Rob Kochel, VP, National Accounts, Invesco Trimark; Cynthia Kett, CA, CGA, RFP, CFP, Stewart & Kett Financial Advisors Inc., Toronto; James R. Taylor, CLU, Financial Health Management, Toronto; and Rob Kelland, CIM, FCSI, Portfolio Manager, Director Wealth Management, ScotiaMcLeod, London, Ont. (Front Row, Left to Right) Justin Graham, Senior Research Manager, Rogers Business and Professional Publishing Group; John Maniatis, SVP, Marketing Communications, Invesco Trimark; Tricia Benn, Director, Rogers Business and Professional Publishing Group; Barbara Foy-Pilchner, VP, Business Development, Invesco Trimark; Vinod Ramlakhan, Research Analyst, Rogers Business and Professional Publishing Group; Kanu Vashisht, Associate Editor, Advisor’s Edge and Advisor’s Edge Report; and Mark Noble, Senior Reporter, Advisor.ca.

Telephonic Participants: Eva Froese, PFP, Investment & Retirement Planner, RBC Wealth Management, Calgary, Alta.; and Bernie Geiss, CFP, CLU, RHU, Cove Financial Planning Ltd., North Vancouver, BC.