Whether you’re an investor, advisor, or entrepreneur seeking investment, Salesforce’s recently published 2016 Connected Investor Report can help you navigate the financial landscape.
Salesforce Research surveyed 7,900 adult investors, 4,944 of whom currently have money invested, in six global markets: Australia, Canada, France, Japan, the U.K., and the U.S. Of the investors surveyed, 1,354 were from Canada, 2,075 from U.S., and other countries are represented by between 1,000 and 1,300 responses. The survey was conducted online by Harris Poll February 24-29.
The purpose of the survey was to learn about investor-advisor relationships, electronic investment platforms, and investor trust during volatile times. As you’ll read in the summary below, we found that investors want to see a zoomed-out picture of their financial lives.
The world of investment is full of choices. We sought to understand how investors made some of those choices: Surveyed adults were asked where they invest, what systems they use to invest, and how they choose a financial advisor when they want help.
In an ideal world, they prefer using modern tools in collaboration with their financial advisors. Investors don’t meet with their advisors often; however, meetings are usually done over the phone, via email, or in person, as opposed to live chats or texting. The recent economic volatility in the first quarter of 2016 caused many investors to have concerns about their financial futures, and they expressed that they’d like their advisors to be more proactive in managing their relationships with clients.
Overwhelmingly, people put at least some of their money in savings accounts: 68 per cent of people surveyed in Canada invest in savings accounts, compared to 71 per cent overall in the survey. In Canada, 70 per cent of people also invest in checking accounts, 13 per cent in stocks and equities, and 26 per cent in mutual funds. Less than 10 per cent each invest in hedge funds, certificates of deposit (CDs), currencies, dividend-paying stocks, bonds, and real estate.
With international investors we saw similar trends, except in checking accounts. Those numbers vary widely, with 66 per cent of people in the U.S. investing in checking accounts, and just 7 per cent in Japan. All the other countries represented—Australia, France, Japan, the U.K., and the U.S.—invest significantly less in mutual funds than Canadians do.
Currently, 38 per cent of surveyed Canadians invest on their own without the help of a financial advisor. Thirty-six per cent collaborate with their advisors, while 26 per cent have advisors who handle all of their investments for them. Nearly half (47 per cent) of Canadians who want to change that want a more collaborative relationship with an advisor. Currently, only 12 per cent of investors use digital advice platforms to manage all or some of their investments. International trends are similar.
Of all people surveyed, 84 per cent said fee structure was important when choosing an advisor. Eighty-two per cent said convenience was important, while 60 per cent said peer recommendations mattered. Despite the fact that so few investors currently use digital advice platforms like Wealthfront or Betterment to invest, the ability to use modern tools is important to 67 per cent of people surveyed. These platforms tend to provide additional perks, such as a holistic view of one’s finances and online reviews of potential advisors—which 76 per cent and 57 per cent (respectively) of investors want when choosing an advisor.
When we asked investors about how they interact with their advisors, we got some surprising responses. For example, 8 per cent of investors don’t know the gender of their advisor, suggesting that all communications had been in writing or through an advising platform. While most investors have more interactions with their advisors, they don’t meet very often. Despite that, most investors are happy with their current advisements.
In Canada, 38 per cent of investors meet or communicate with their advisors quarterly, 31 per cent annually, and 12 per cent less once per year. Weekly and monthly meetings are rarer. International trends are similar, with Japan being the outlier. Japanese investors tend to meet with their advisors more regularly; 13 per cent meet more than once a week, 24 per cent said they meet with their advisors weekly, and only 21 per cent said quarterly.