A new study shows that CRM2 is effective at increasing younger Canadians’ comprehension of fees—and at motivating them to leave their advisors.
Young people in B.C. between the ages of 18 and 34 have a greater understanding of their investment fees as a result of CRM2, finds the BCSC in part four of its longitudinal study on fees.
Specifically, millennial investors were more likely than older generations to recall both their 2017 and 2018 fee reports—62% compared to 53% for those over age 35. The study shows that 76% of male and 74% of female millennials agreed the CRM2 fee disclosure reports provide information they need to better understand the fees they pay.
After receiving their 2018 CRM2 reports, male millennials were by far the most likely to say they discussed the reports with their advisors (60% compared to 31% overall).
These results indicate an improvement since 2016 when the study began, with half of millennials in the study (49%) indicating some long-term improvement in their general understanding of fees, says a release.
Since the first part of the study, millennials have also shown they’re more likely than other generations to make changes to how they invest. Although they’re no more likely than other age groups to take new action after receiving the reports, those millennials who did act were more likely than older generations to change their advisors or firms (28% of millennials compared to 20% of those ages 35-54 and only 7% of those 55 and older).
About the BCSC study: The four-part longitudinal study tracked investor knowledge and behaviour before and after receiving the new CRM2 reports. The study looked at only investors who work with advisors and was conducted by Innovative Research Group Inc. from November 2016 to March 2018.