Many investors are happy with their advisors, and if their advisors switched firms, 51% would follow them to the new firm, finds a survey by Natixis.
Still, investors want their advisors to offer more services and information. In order of importance, investors say they wish their advisors would do more of the following:
- provide a clear explanation of fees;
- offer investments that reflect personal values;
- help manage market volatility;
- help with tax issues;
- help discuss financial planning with family members;
- discuss charitable giving and philanthropic goals; and
- talk about estate planning.
The list largely indicates that the services and information clients desire should reflect their personal situations. That tends to align with results from another recent survey that found 92% of advisors think sharing articles or other relevant information is important to investors, while significantly fewer investors agree (68%).
Fees matter most
Here’s a list of what surveyed investors rate as important when choosing an advisor:
- cost of advice (50%)
- referral from friends and family (47%)
- qualification (i.e., education, credentials) (43%)
- size and reputation of the firm (39%)
- comprehensive financial plan (36%)
- personal connection (22%)
- access to tax-efficient investments (20%)
- access to unique investment opportunities (20%)
Investors want gains
The survey also notes that investors’ appetite for gains exceeds their tolerance for risk. In fact, investors expect annual returns of 9.8% over inflation to reach their financial goals, up from 9.3% in 2016. Further, 62% are comfortable taking risks to get ahead.
If forced to choose, 83% of investors would choose safety over performance.
Here are some additional findings about specific investments.
- Alternative investments: 79% of investors say they are willing to invest in assets other than stocks and bonds; 54% think it’s essential to invest in alternatives to reduce investment risk; and 62% believe alternative investments would give them higher returns than traditional stocks and bonds.
- Passive investments: 56% believe these investments are less risky; 63% think they can help minimize losses; and 59% think passive investing allows them to access the best opportunities in the market.
- Environmental, social and governance (ESG) investments: 83% say it’s important to invest in companies that are ethically run; 74% say there are companies they don’t want to own because they violate their principles; and 66% would sell their holdings if a company they own had negative environmental or ethical issues.
About the survey: Natixis surveyed 300 individual investors across Canada with a minimum of $100,000 in investable assets. The online survey was conducted in February 2017, and is part of a larger global study of 8,300 investors in 22 countries and regions from Asia, Europe, the Americas and the Middle East.