Most Investors Rely on Advisors For Funds

By Andrew Rickard | October 20 2015 10:23AM

Joanne De Laurentiis

Research conducted by the Investment Funds Institute of Canada (IFIC) shows that mutual funds continue to be Canadians' preferred investment option, and that most people buy them through a financial advisor.

On Oct.15, IFIC released its tenth annual study on how Canadians perceive mutual funds and the fund industry. The survey of more than 1000 investors found that 87% of investors said they were confident that funds will help them meet their financial goals, while individual stocks, GICs, and bonds only received the approval of 62%, 61% and 55% of respondents respectively.

The survey also showed that consumers both trust and rely heavily on professionals when making their fund purchases. IFIC says that 84% of consumers use advisors when purchasing mutual funds, while only 14% buy online or from someone who simply processes the order. What's more, 94% of mutual fund investors believe they trust their advisor to provide them with sound advice.

In fact, advisors are consumers' preferred source of information about the product. When considering a fund purchase, 82% of investors prefer to discuss it with an advisor, 64% prefer an e-mail newsletter from an advisor, and 53% prefer an advisor’s website. However, 57% of investors also want to receive fund information from the news media.

IFIC notes that advisors serve investors of all levels, many of whom began with small accounts; 40% of mutual fund buyers had less than $10,000 to invest when they first started using an advisor, and 58% had less than $25,000.

“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,” says IFIC president and CEO Joanne De Laurentiis. “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.”

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