Advice isn’t limited to wealthy individuals. Turns out, most investors first seek advice to start investing and grow their assets, says the 2011 Report on the Value of Advice released by the Investment Funds Institute of Canada (IFIC).
In its second edition, the report provides evidence on the durable value that advice, and the relationship with an advisor, has for investors.
“The mutual fund industry provides Canadians access to capital markets with even small amounts of investable assets,” said Joanne De Laurentiis, president and chief executive officer, IFIC. “With the valuable assistance of an advisor, those small amounts compounded over time can grow into a substantial investment portfolio.”
The findings quantify some of the yield advantages of advised portfolios, which, when compounded over a working lifetime, explain the sizably larger investment portfolios of advised investors relative to non-advised investors. For example, of investors aged 18-29 with advisors, 45% are saving for retirement, versus 23% of same-aged investors who don’t have advisors.
The 2011 Report answers the question of whether investors accumulated wealth before they sought out advice. Most investors first begin to work with an advisor with only modest amounts to invest – typically less than $25,000 – and at relatively young ages. The 2011 Report builds on the 2010 Report by focusing in particular on three areas:
- The link between receiving advice and wealth accumulation;
- The investment plan and how it pays off; and
- A more quantified look at the components of value that flow from an advisor-client relationship.
The 2011 Value of Advice: Report is available on the IFIC website.