Canadian investors seek diversification, with a large proportion planning to work with multiple providers, including fintechs by 2025. According to an EY survey, 40 per cent of investors are eager to increase or maintain their usage of digital service providers and digital assets in the next three years to unlock value and enhance their investment performance.
Canadian investors are also twice as likely to change wealth managers due to economic uncertainties and differing values compared to global counterparts.
The 2023 EY Global Wealth Research Report reveals that Canadian investors are nearly twice as likely as their North-American counterparts to switch wealth management providers within the next three years. This number doubles if their existing advisors do not share the same values.
The shifting landscape of the Canadian investment market is driven by economic uncertainties and an increasing willingness among investors to explore different products and providers.
David Hurd, EY Canada national wealth management leader, highlights this transformation, stating: “Wealth managers have a unique opportunity to embrace this shift by demonstrating to clients the value they can deliver while navigating this complexity.”
The survey indicates that 45 per cent of Canadians are actively seeking to add, switch, or move wealth management providers. This reflects a significant 24 per cent increase since the 2021 EY Global Wealth Research Report. The intention to act varies across Canada, with 29.9 per cent of respondents from the Western provinces expressing the desire to make changes compared to 57.7 per cent of respondents from the East Coast provinces.
When selecting a wealth and asset manager, Canadian investors prioritise factors such as brand reputation and personal referrals more than their global counterparts. However, investment performance and fees remain top considerations nationwide, with 48 per cent of investors emphasising investment performance and 40 per cent emphasising fees when choosing a wealth manager.
Looking ahead, a notable trend emerges among Canadian investors as they increasingly expect to work with multiple wealth management providers by 2025. This approach is seen as a way to achieve better performance and diversification. In fact, 40 per cent of Canadians are willing to increase or maintain their use of digital service providers, including fintechs and digital asset offerings, to unlock the value they seek.
The pandemic has also significantly impacted the preference for virtual advisor interactions among Canadian investors. In 2021, only 12 per cent of investors preferred virtual consultations, but that figure has now risen to over 40 per cent. Virtual consultations are now on par with in-person meetings as the most preferred channel for planning and advice activities. However, overall digital engagement preferences in Canada still lag behind the global average.
Hermine Ferron-Brandin, associate partner, business transformation at EY, highlights the need for personalised experiences that provide unwavering support throughout the wealth management journey.
“Given the demand for digital services, wealth managers should aim to foster a broad client experience that blends virtual and in-person touchpoints through innovative collaboration tools and self-service capabilities,” said Ferron-Brandin.
The findings of the EY survey highlight the evolving preferences of Canadian investors and the importance for wealth managers to adapt to these changing dynamics. By embracing technology and offering tailored experiences, wealth managers can better meet the needs and expectations of their clients in the digital age.