By Mark Barnicutt on September 25, 2015
A recent article in Investment Executive highlights the results of a mystery shopping exercise wherein investment advisors were secretly evaluated by three securities regulators (OSC, IIROC, and MFDA) in 2014. Unfortunately, the results are in line with the shortcomings in the investment industry that we at HighView have been working to shed light on for some time.
Here are some interesting (yet scary) stats:
- Only 25% of advisors talked about advisor compensation
- Product fees were only discussed about 50% of the time
- Only about 50% of advisors explained the trade-offs between risk and return to investors
“[The mystery shoppers] made a number of key findings: that it is often hard for many investors to decide whether they have received suitable advice; that it’s difficult for them to understand the assortment of titles used by reps; and, that it is tough for them to comparison shop.”
This report also indicates that the pending final stages of CRM Phase 2 over the next year, which will finally force fee transparency on the investment industry, will be a monumental business shift for the majority of advisors in this country. If only 25% of them (based on this study) are talking about advisor compensation, how will they fare when mandated to be transparent?
Fee and cost transparency is a must when it comes to investment advice and wealth stewardship. We believe that advisors should be completely open about their structures, practices, and costs – and certainly not subject their clients to unexpected or hidden fees!
>> HighView Financial Group is an investment counselling firm for affluent families and foundations. We are happy to discuss our fee and cost structure with you. Schedule a complimentary discovery session to see if we’re the right investment counsellors for you.
Want to know how CRM2 will affect you or your clients? Sign up for our upcoming CRM2 webinars for Canadian investors and professionals.
You may also be interested in:
- Management Expense Ratio: True Disclosure from CRM Phase 2
- Getting Value from the Investment Management Fees You Pay
- Investors Need More Meaningful Risk Measures
- Loren Francis Appointed to HighView Portfolio Strategy Committee - February 10, 2017
- Join Us for the “Choose Your Alternative Wisely” Seminar in Toronto on March 2! - January 31, 2017
- CRM2 Update – 2017 Is the Year for Positive Change - January 20, 2017
- Season’s Greetings to Our Valued Investors and Their Families - December 16, 2016
- True Portfolio Transparency: The Complete Unbundling of Service Providers and Their Fees - December 9, 2016
- Integrated Wealth Management Advice for Affluent Canadian Families: Part 4 – The 5 Costs of One-Stop-Shop Wealth Advice - October 12, 2016
- Welcoming Loren Francis to the HighView Team! - August 2, 2016
- Integrated Wealth Management Advice for Affluent Canadian Families: Part 3 – Convenience vs. Competency - June 23, 2016
- Integrated Wealth Management Advice for Affluent Canadian Families: Part 2 – Are the Needs of High Net Worth Clients Met? - June 9, 2016
- Challenges Facing Foundations Seeking Effective Asset Management (And the Solution!) - April 26, 2016