To better understand the attitudes and opinions of Canadian mutual fund holders, the Investment Funds Institute of Canada (IFIC) commissioned independent research firm Pollara to conduct a national study. The latest report – Canadian Mutual Fund Investors’ Perceptions of the Mutual Fund Industry 2016 – represents the 11th year Pollara has embarked on this type of research for IFIC. The findings were obtained through a telephone survey with mutual fund holders across Canada and aimed to identify their needs, expectations and behaviours regarding mutual funds, while tracking these variables over time.
Below, we highlight and summarize some of the report’s most important findings. You can also view the full report by clicking here.
Confidence in mutual funds over other products
Mutual funds holders continue to maintain significantly more confidence (86%) compared to other investment vehicles; namely, stocks, guaranteed investment certificates, bonds and exchange-traded funds.
Knowledgeable about investing in mutual funds
Over the last 10 years, approximately three-quarters of investors say they are knowledgeable or somewhat knowledgeable about mutual funds. One quarter have consistently rated themselves as not well informed.
Reasons for investing in mutual funds
One half of investors say retirement funding is the primary reason for investing in mutual funds and a further 14% say it’s intended to augment their income at retirement or later in life.
Recent mutual fund purchases
In the previous 12 months, just over one-third purchased a mutual fund, while one-half last purchased a mutual fund between one and five years ago. There’s no major difference in purchases between 2016 and 2015.
Using advisors to purchase mutual funds
In 2016, nine out of 10 mutual funds were purchased through a financial advisor; in 2011, it was eight out of 10. The findings indicate that purchasing mutual funds online or through customer service representatives has not caught on significantly.
Satisfaction with advisor advice
The study shows that almost all investors have confidence in the advice of their financial advisor, contributing to an overall satisfaction rating of 97%.
Confidence in understanding fees
Since 2010, the proportion of investors confident that they understand the fees they pay has moved up from two-thirds to three-quarters. In 2016, 74% were confident in their understanding, while 24% were not. Most advised investors (91%) said they get value from their advisor, while only 8% said they do not.
Fees used to compensate advisors
Most mutual fund buyers (73%) are aware the fees they pay are used in part to compensate their advisor, which is up three points from 2015. Many, however, aren’t sure and close to two-thirds offer tentative answers or say they don’t know.
For greater detail on these findings or information on other findings in the study, please view the full report: Canadian Mutual Fund Investors’ Perceptions of the Mutual Fund Industry.