Confidence in Funds Remains High; Suitability Conversations Continue to Rise

TORONTO, Oct. 16, 2015 /CNW/ - For the tenth year in a row, research conducted by Pollara on behalf of The Investment Funds Institute of Canada (IFIC) demonstrates that mutual funds continue to be the savings vehicle of choice for Canadian investors.

According to the 2015 report Canadian Investors' Perceptions of Mutual Funds and the Mutual Fund Industry, 87 per cent of investors say funds will help them meet their financial goals. Fewer investors express confidence in stocks (62 per cent), GICs (61 per cent) and bonds (55 per cent).

"For the past decade, Canadian mutual fund investors have consistently expressed strong confidence in the ability of mutual funds to meet their goals, more than any other financial product," states IFIC president and CEO, Joanne De Laurentiis. "This reflects our industry's success in meeting investors' needs in an ever-changing marketplace." 

Confidence in financial advisors remains high, with 94 per cent of mutual fund investors acknowledging they can trust their advisor to provide them with sound advice. Advisors continue to be by far the preferred source of information about mutual funds through conversations (82 per cent), advisor e-newsletters (64 per cent) and advisor websites (53 per cent). The other top source is news media (57 per cent).

The vast majority (92 per cent) of respondents say their advisor discussed the suitability of their chosen product relative to their individual investment goals. This indicates slow but steady improvement over the past seven years in the number of suitability discussions reported by investors.

Ninety-one per cent of respondents agree that they received a better return on their investments than they would have without an advisor. Recent studies by CIRANO and the Conference Board of Canada underline how financial advice increases investor savings and improves Canadians' long-term economic security.

These benefits are enjoyed by investors at all levels, most of whom have small accounts when they begin investing. Forty per cent of those surveyed had less than $10,000 to invest when they first started using an advisor, and more than half (58 per cent) had less than $25,000.

"It is crucial for public policies and our regulatory environment to recognize and support the industry's vital role in helping investors at all levels move toward financial security in retirement, through product options and broad access to financial advice," De Laurentiis states.

New this year are questions to assess the type of services that investors are receiving. The study found that more than half of mutual fund investors who use an advisor receive services such as investment planning (58 per cent), financial planning (55 per cent), and retirement planning (48 per cent).

Pollara found that almost nine out of 10 investors are satisfied with the value for money they receive in terms of both service and performance. This data, in combination with responses to questions first asked in previous years about fees, may help the industry and others to assess the impact of phase 2 of the client relationship reforms (CRM2).

The Pollara research report is based on 1,008 telephone interviews with mutual fund holders 18 years of age or older who make all or some of the decisions regarding mutual fund purchases in their household.

About IFIC

The Investment Funds Institute of Canada is the voice of Canada's investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada's savers to Canada's economy, our industry contributes significantly to Canadian economic growth and job creation. The organization is proud to have served Canada's mutual funds industry and its investors for more than 50 years.

SOURCE The Investment Funds Institute of Canada

Sara Clodman, Senior Manager, Public Affairs, [email protected] 416-309-2317