My husband and I have used the same financial adviser for more than eight years. At the start of our marriage, she helped us develop a financial plan, set financial goals and build a diversified portfolio. As our family grew, we turned to her for advice on insurance, wills, and RESPs.
When the market turbulence of the past year rocked our portfolio, we spent a lot of time talking to our adviser about our investment strategy. She counseled us to take a long-term view and stick with our plan. We invested more this past March, a fortunate move that erased most of our portfolio losses during the market rebound. We have stuck with our advisor because we like her record, her style and her accessibility. That we actually like our adviser puts us solidly in the minority of investors these days.
After the hit Canadians took on their portfolios last year, many are planning to change their investment strategies this coming RRSP season. And many blame their financial advisors for their losses.
Those are the findings of a recent survey by Maritz Research Canada that polled 500 Canadians with at least $75,000 in investible assets.
"Our survey shows that Canadians are re-examining every aspect of their investing strategy, from the firm and advisor they work with, right down to the specific makeup of their portfolios," says Rob Daniel, Managing Director, Maritz Research Canada. "We predict a continued flight to safety among Canadian investors, which bodes well for Banks, Credit Unions and others who traditionally attract more risk-averse clients."
Seventy per cent of investors surveyed believe that less risky investments are currently the best strategy. They're also highly skeptical of the financial advisors who watched their portfolios crash.
"There is real uncertainty out there," Mr. Daniel says. "It's a good time to hate investment advisors. It ties into our uncertainty around the economy. Unless we're getting superior service, it's easy to blame the adviser."
Thirty per cent of the investors surveyed did not plan to maintain or increase their level of investment with their advisor. But despite losing money, many investors remain loyal to their financial advisors. In fact, while 40 per cent say now would be a good time to look for a new advisor, few have intentions of doing so.
However, much of the loyalty may be due to investors' lack of ability to move to a new advisor. "Most of the loyalty is driven by inertia rather than acute feelings of connection to them," Mr. Daniels suggests.
There are several attributes that Canadian investors say they look for in a financial adviser. They include frequent contact, proactively offering solutions, helping create a useful and achievable financial plan, being treated as a valued client and giving objective advice.
I would never advocate a financial adviser for everyone. I have several friends who do very well overseeing their own portfolios, eschewing management fees and investing in ETFs or corporate debt. But if you do want a financial adviser, don't be afraid to dump one who doesn't meet your needs and find one who does. There's still time before RRSP season arrives.