The trust that Canadians have in financial advisers, the financial industry and digital advice became more positive last year, after a long period, in which all three funds fell gradually. However, this year, scientists from PMG Intelligence expect these numbers to soften again due to market variability.
PMG observations come from aggregation of signed research over 10 years.
In the years 2017–2023, trust in financial specialists fell by 11 points, from 54% to 43%. At the same time, trust in the financial industry fell to 40% from 46%. We do results in the 2019 work case.
In 2024, we noticed an increase in trust in 2024, because the markets were reflected and the inflation seemed to weaken. However, the increased market variability and uncertainty related to the potential trade war from the US forecast a decrease in trust this year, back to 2023 levels, and even lower.
Trust matters
Investors who work with a financial advisor notice higher trust than those who do not do it. But only three out of five people working with a financial advisor claim that they have trusted relationships with this adviser.
Customers who report higher levels of trust will more often be fully satisfied and continue to use the finance provider. They are also 1.5-1.7 times more likely that they will refer Their advisor to someone else, compared to those who only trust their adviser a bit.
These customers use more products and also devote most of the portfolio to their adviser. They are 1.8 times greater likely to invest in ETF, 1.7 times more likely that they invest in Resp, 1.7 times greater the likelihood of investing in GICS and 2.5 times more exposed to investing in segregated funds.
Trust has quantifying consequences for customer acquisition, product use and profitability.
Investors’ experience
People value professional financial advice because their finances become more complicated and have more money saved. Interest in working with an adviser usually reaches a peak between 30 and 34 years old. The $ 50,000 threshold is another key tag.
Ironically, too many potential customers at this stage of life are rejected or redirected to DIY solutions. Up to 35% of investors with assets below 100,000 USD, regardless of age, it is said that they do not have enough money and are better for digital solutions.
This layer of access to financial advice results from the profitability and the need to scale by financial suppliers and advisers. Given the decreasing trust of Canadians-especially with digital tips-it is extremely short-sighted.
Advisors and companies open to the implementation of investors earlier in the assets of assets will have an advantage over the consolidation of their position as the main supplier; The decision decides generally between 40 and 45 years old.
Three ways to build trust
Our data analysis indicates three actions that advisers can take to gain the trust of Canadians.
First of all, the industry must look at the new model tips for younger investors with lower assets-especially those who have USD 50,000 or more investment assets aged or almost 30 years old. Establish advisory relationships with young investors, regardless of their wealth.
Secondly, promote the delivery of a documented financial plan. Our research confirms that 70% of people with a written financial plan trust their financial advisers. Only 39% of people without a written plan say the same. Investors invest more often if they have a plan written by a professional adviser. It has 26 percentage points more likely that they will plan the GIC investment or joint investment funds, and 20 points will more often plan a capital or permanent income investment.
Third, contact clients proactively. Studies emphasize that proactive contact and service can have a significant impact on trust. And although even one contact per year can move the needles, a sweet place to maximize trust seems to be from two to three contacts a year. This level of activity strengthens the trusted nature of the relationship.
These steps are fundamental to establish and strengthen trusted financial relationships. The results will benefit financial providers, advisers and, most importantly, investors.
