The mutual funds and exchange-traded funds (ETF) industry in Canada has more than doubled in size since 2006 and has become critical to Canadians relying on financial advisors to provide them with accurate investment and savings advice, according to a new report.

The Conference Board of Canada recently released the report outlining that Canadians are using financial advisory services at much higher rates than in the past, in line with an aging population.

The funds industry, states the report, has grown from under $100 billion in the early 1990s to $1.71 trillion in May 2019, accounting for about 38 per cent of all privately held financial wealth in Canada.

The funds industry contracted following the 2008 financial crash, when revenues fell 15.8 per cent, but recovered strongly in 2010, posting annual revenue growth of 18.9 per cent.

Assets held by mutual funds and ETFs in Canada rose 117 per cent between 2006 and 2018.

Importantly, assets invested and administered by wealth managers in Canada are often personal savings and retirement planning funds that Canadians entrust to their financial advisor.

“The funds industry plays a key role in promoting higher savings rates and in helping Canadians invest their savings to prepare for future financial goals,” states the report.

The money investors pour into funds is also a source of funding for Canadian firms and governments.

According to Fundata, the Canadian investment funds industry currently provides Canadian companies with $370 billion in capitalization in the form of equity and a further $167 billion in funding via corporate bonds, says the Conference Board.

Canada’s funds industry is significantly larger than that of most other developed countries when measured against national output.