What clients aren’t telling you

The OSC’s Investor Advisory Panel has released findings of a new study on investors’ relationships with their advisors.

Read: Canadian clients dissatisfied: survey

It was conducted on behalf of the IAP and the Investor Education Fund (IEF), and explores how investors perceive and use investment product information and advice.

Highlights of the study include:

• While investors generally trust the advice of their financial advisers, only 20% fully agree with it. Further, 25% say how a planner is paid impacts the recommendations they’re receiving rather than their own best interests.

Read: Worry about value, not fees

• They strongly support statutory, best-interest duty, with 93% saying it’s needed to ensure they’re served fairly.

• Investors want strengthened regulation of financial advisers, including: clearer professional standards on use of the titles; rigorous educational requirements and ethics training; and stricter regulatory enforcement of the rules.

Read: Advisors should earn their titles, says Advocis

“This investor research will inform and support our recommendations to the OSC regarding future statements of priorities,” says IAP chair Paul Bates.

IAP is calling for the introduction of a statutory, best-interest duty to replace the current inadequate suitability regime. It also wants reforms to mutual funds’ compensation structures in Canada.

Read the full study and accompanying documents (Choicebook and Dialogue Guide).

Also read:

Are your clients itching to leave?

IIAC to regulators: clients trust advisors

Advisors need to be emotional shock absorbers