Full-Service Wealth Management Firms in Canada Fall Short in Providing Comprehensive Advice

Although satisfaction among investors with full-service wealth management firms in Canada has increased slightly to 669 (on a 1,000-point scale) from 666 a year ago, only a fraction of those investors are getting the holistic and comprehensive financial advice that is the core value proposition of the industry. According to the J.D. Power Canada 2022 Full-Service Investor Satisfaction Study,^SM released today, while 40% of investors say their financial advisor provides them with comprehensive advice, a deeper analysis reveals that only 7% of investors receive all the elements of comprehensive advice as defined by J.D. Power criteria. The criteria include making recommendations in an investor’s best interests; understanding an investor’s goals and needs; and having a documented financial plan. This year’s study results also put Canada’s wealth management industry behind that of the United States, where 14% of full-service investors in 2022 receive comprehensive advice.

“As the traditional advice model faces more challenges from lower cost and technology-driven alternatives such as digital or robo-advice, it’s more critical than ever that advisors provide something truly differentiating to their clients,” said Mike Foy, senior director of wealth intelligence at J.D. Power. “While the industry has long touted comprehensive advice, the study shows that very few full-service investors in Canada—even those with high net worth—are truly receiving such advice from their advisors. And, while many investors may be willing to settle for something less, it’s the investors who do receive comprehensive advice that consistently provide the referrals that drive growth.”

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