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Pattie Lovett-Reid

Chief Financial Commentator, CTV


Investors are likely not blaming their advisor for the recent market performance, but you have to wonder if they’ll blame them for how they handled the current situation with their clients. 

Money is mobile, sensitive and scarce. At the best of times, it doesn't take much for an investor to feel they aren't getting the attention they feel they deserve from their investment advisor. Money is personal and can be very emotional. 

A new J. D. Power survey conducted just before the market crash highlights how important communication is. Satisfaction with full-service investment firms in Canada improved significantly year-over- year; however, they recognize this was the period of calm before the market storm. 

Clients will take only so much as frustration mounts.

J.D. Power found  70 per cent of investors in Canada who highly trusted their investment firm say they’ll definitely remain with their current provider, even if their portfolio performance does not meet expectations. By contrast, only 16 per cent of investors say they’ll definitely stay loyal to their current provider when investment performance lags expectations.

This should be ringing alarm bells at investment firms.

When it comes to money, you can't underestimate the importance of trust.  So not surprisingly, a few things stood during the challenges being faced by the COVID-19 pandemic.

Digital communication has become more important and will likely grow given current period of isolation. Video chat, emails, conference calls, and periodic texting can go a long way to secure more funds and a solidify the relationship.

We have heard this before and still holds true: Millennials can be great brand ambassadors and make referrals far more often than baby boomers. As the population ages and wealth transfers from one generation to the next, the millennial cohort will be key. Yet the J. D. Power study found a missed opportunity. Sixty-eight per cent of boomer investors designated a beneficiary, yet only 31 per cent of financial advisors asked about their beneficiaries’ investment needs.

As COVID-19 continues wreak havoc on portfolios, you may be wondering what to ask your advisor. Here are a few questions I've been asking mine.

1. Should we be adjusting our portfolio given the market volatility?

2. What are some of the signs it is time to buy?

3. Does my portfolio reflect my risk tolerance, or is it out of balance?

4. How often can I expect to hear from you? 

5. How are you compensated?

Back to my earlier point: It’s unfair to blame your advisor for the market downturn. No one really saw it coming. It is, however, fair to blame your advisor for not reaching out and communicating the current status of your financial situation during this pandemic. In today's digital environment, it isn't difficult to move your portfolio to a new advisor in a heartbeat.