Canadian wealth managers are leaving many clients’ needs unmet and risk overlooking the next generation of investors, said a new study from research firm J.D. Power.
Only 36% of investors say their wealth management needs are completely being met by their firm, according to the J.D. Power 2021 Canada Full-Service Investor Satisfaction Study released Thursday.
The study — based on responses from 3,577 investors who make some or all of their investment decisions with a financial advisor — was conducted between December and February. It measures investor satisfaction based on people, trust, products and services, value for fees and problem resolution, among other factors.
Investors who are offered advanced services such as estate planning and philanthropic giving are more satisfied, the study found, with 43% saying their needs are being met.
J.D. Power warned that wealth management firms risk alienating younger investors, in particular. Fewer than one-quarter of investors under 40 see a clear commitment to ethical investing from their firm, while almost half have doubts about their firm’s commitment to environmental, social and governance (ESG) investing.
“We are at the tipping point of a massive generational wealth transfer,” said Mike Foy, senior director and head of wealth intelligence at J.D. Power, in a release.
“Investors in Canada — especially younger ones — increasingly want their investments to align with not only their financial goals but also their values. Wealth management firms and advisors have a critical role to play in helping them do this, and they can’t afford to wait for clients to ask them about it.”
Young investors who strongly believe their firm is committed to ESG investing are far more likely to increase their investments and act as brand ambassadors, the study found.
J.D. Power also ranked Canadian firms based on investor satisfaction.
CI Assante Wealth Management topped this year’s list, followed by National Bank Financial, iA Private Wealth, RBC Dominion Securities and Edward Jones.