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The rules on transparency could not give more latitude to the client


Susan Yellin

21 July, 2017 09:45

Photo : Freepik

The price that the customer pays for products and services is an inseparable element of universal needs and the immutable of the consumer. However, the recent canadian rules on transparency do not necessarily give the customer as much flexibility as would like the regulators, writes Michael Foy, the director of practice and wealth management for J. D. Power.

Mr. Foy said, in a conference recently organized by thecanadian Association of securities trading (IIAC), as the implementation of phase 2 of the client relationship model-adviser (MRCC2) and its requirements of transparency and openness has attracted the interest of some customers, giving advisors the opportunity to showcase what they have to offer.

Are they aware of what they are paying for ?

The financial services firm may be required to provide to investors certain information concerning the cost and the performance of their investments, this does not necessarily mean that they will understand what they are paying, says Michael Foy.

«When it comes to the question of fees as it fits in the investment market with traditional service, you will see that you don’t really see big changes if we compare with what it was in 2012. «

Mr. Foy stated that in 2012, 30% of customers to receive traditional services claimed to understand the fees that they pay, so that by 2016, only 27 % said it is less than in 2012. He admits to having looking forward to taking knowledge of new figures that will be published this autumn by J. D. Power to see if the advisors explain regularly the nature of their fees.

The regulation requires that we provide more information, does it, » but in many cases, we find that the more one says, the more people are confused, and mixed up instead of feeling that there is more transparency, as this is the intention «. Michael Foy think, however, that a good presentation of the nature of the fees may be available to some advisors and firms a way to distinguish yourself in a positive way.

In search of the convenience

Michael Foy reports that the best vendors are designing strategies that take into account the needs of the client and which do not change with time, even if the technology and innovation allow us to invent better tools to meet the needs in question. If the prize is part of these strategies, their key element is the convenience. According to him, investors are on the lookout for firms that put their products and their strategies to reach customers without them having to deploy too much effort.

Many investors, mainly in the age bracket of the baby boomers, are looking for a brand that will meet all of their needs in wealth management, he adds.

What is expected of the advisor

Investors also like firms that treat them as individuals in their own right, says Michael Foy. J. D. Power has in fact found that most of the investors who have an adviser does not wish him to leave all the decision-making. It mentions that customers of all ages will rather serve as their advisor to help them to validate their own decision.

«If you want to give a personalized service to your customers, it is essential to grasp their expectations,» he said. The milléniaux are not all the same, any more than the baby-boomers are not all the same. However, these trends are generational cause to believe that the perception that people have of the advisor is evolving, just as what counts for them in this relationship. «

A lot of interest to the traditional council

If it is true that young investors may first look to the robots-advisers when they start their portfolio, all age groups are very interested to take advantage of services-traditional advice of a financial adviser, he noted.

«Even on the side of the milléniaux, we see that investors will increasingly report that they have also a traditional account or anticipate to need to open one at a time, one to three years,» says Michael Foy.

A wider choice of avenues

«One thing is certain, there is nothing to indicate that even young investors are turning their backs on the value proposition of the financial advisor traditional. At the same time, there are actually a wider choice of avenues through which one can guide and advise a client, and this is mainly due to the technology. »

Finally, there is one last key element that has not changed for years, and this is the confidence, » he said. The client needs to know that the counselor understands this, that they are a team and that the counsellor takes care to have a long-term vision, » concludes Michael Foy.

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