The second part of the three-part longitudinal study commissioned by the BC Securities Commission (BCSC) is now available. Here are our top three findings.
1. BC Investors Find Value in New Fee Reports
By now, many investors have received new information about the fees they pay for investment products and advice, thanks to securities regulations called the Client Relationship Model, Phase 2 (CRM2).
If you’re in the habit of ignoring your investment statements, now’s the time to look. That’s because we just surveyed 500 BC investors and what they told us was that the new fee reports are actually useful. A majority of the investors surveyed thought their CRM2 fee reports were easy to understand (62%) and provided the information they needed to understand fees associated with their investments (67%).
2. Investors Gain Knowledge about their Fees
The new fee reports are not only easy to understand, they also help you learn more about the fees you pay. Investors who participated in the first two surveys found they are more aware of the fees they pay, after receiving their CRM2 fee reports (76% and 59% compared to 67% and 48% in part one).
In fact, investors are more knowledgeable about their fees after they read their CRM2 reports. Those with smaller portfolios (less than $50k) were much more likely to agree that fees can be negotiable (47%) and that similar products can have different fees (71%) than before receiving their CRM2 fee reports (32% and 49% in part one).
3. It’s all About Trust and Communication
As with any relationship, trust and communication are key in the client-advisor relationship. Our findings show that investors trust their advisors as much now as they did before receiving their new fee reports.
Previous BCSC research showed that good investment advisors make their clients’ roles and responsibilities clear. They also encourage their clients to stay involved with their investments. The latest BCSC research shows that almost half of investors (48%) report they communicated with their investment advisor about CRM2 before receiving their new fee reports. One-third (34%) reported they discussed the report with their investment advisor after receiving it. The message is clear: If you want more information about the fees you pay, read your CRM2 fee report. If you want to better understand the fees you pay, keep talking to your registered investment advisor.
The BCSC has resources and tools available to help investors learn more about the fees they pay. Read our Fee Guide or try our Investment Fee Calculator that allows you to directly compare different fees and see their impact on investment returns. You can also test your knowledge of fees by taking our Investment Fee Quiz.
The BCSC’s Investor Readiness for Better Investing study was conducted by Innovative Research Group Inc. in March 2017. For more information on the research findings for part two, view the survey report. You can also brush up on the research findings for part one here.
Learn about CRM2 and Investment Fees
Investors can improve their knowledge of investment fees with this CRM2 video series.
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form.
InvestRight.org is the British Columbia Securities Commission’s investor education website.