With nearly 80,000 reps serving nine million households with an average $75,000 in financial assets, mutual fund reps represent the face of financial advice to Canada’s middle class, according to a new report from the Mutual Fund Dealers Association of Canada (MFDA).
The self-regulatory organization released a report showing that 81% of households served by MFDA reps are “mass market” investors (defined as investors with less than $100,000 in financial assets).
The report noted that mass market investors only account for 4% of total financial wealth in the country, but they make up more than one-quarter (26%) of the wealth administered by MFDA dealers.
“The concentration of wealth belonging to mass market households within the MFDA channel demonstrates the important role and value of MFDA members in providing advice and services to these investors who are by far the largest segment of the Canadian investor population,” the report said.
The bulk of MFDA client accounts are registered accounts (86%), the report said. Most of these portfolios (78%) are balanced, or more conservative, in their asset allocation.
“From these results it can be generally inferred that most MFDA member clients are typically middle- and working-class Canadians, are investing for their retirement and are conservative with their investments,” the report said.
The MFDA said it will publish the results of its latest client research project, featuring more detailed data, “in the coming weeks.”
Today’s report comes after a consultation by the Canadian Securities Administrators (CSA) examining reform of the self-regulatory framework in Canada — including a possible merger of the MFDA and the Investment Industry Regulatory Organization of Canada. The deadline for submissions to that consultation was Oct. 23.
The outcome of that review may fundamentally reshape how the retail investment business is supervised in Canada.