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Full-Service Investment Firms Can Be Challenged at Providing Comprehensive Advice

Full-Service Investment Firms Can Be Challenged at Providing Comprehensive Advice

August 24, 2022

Financial advisors face challenges in delivering the services they offer, writes Peter Watson.

Individual financial advisors and the firms where they are employed proudly communicate their service as “holistic advice.” That makes sense because certain things in life, including your personal finances, should be done thoroughly.

However, from a theoretical perspective, nothing is always perfect. At a closer look, we can therefore ask a fundamental question: are the financial services for investors really as “holistic” as they seem?

Only seven per cent of Canadian investors were actually receiving “holistic” advice. This included high net worth clients. The JD Power 2022 Canada Full-Service Investor Satisfaction Study was released this past May and was based on the response of 4,500 Canadian investors.

The report outlines the J.D. Power’s criteria for comprehensive advice, which includes making recommendations in a client’s best interests, understanding the client goals and needs, and having a documented financial plan.

The report also indicated that 40 per cent thought their advisor was providing compressive advice.

The seven per cent number is surprising low. But for some reason, there is an alarming disconnect between the services offered and the satisfaction rate of those clients.

Investor client’s satisfaction with full-service firms was fairly good. Two thirds of investors indicated they were satisfied with the service received.

The survey results suggest investors pay closer attention to the financial service they receive.

That leaves one question: Are you getting adequate financial service?

Peter Watson is registered with Aligned Capital Partners Inc. (ACPI) to provide investment advice. Investment products are provided by ACPI. ACPI is a member of the Investment Industry Regulatory Organization of Canada. The opinions expressed are those of the author and not necessarily those of ACPI. Only investment-related products and services are offered through Watson Securities of ACPI. Peter Watson provides wealth management services through Watson Investments. He can be reached at www.watsoninvestments.com