Dow Jones Can Affluent Investor Report Can Air 5.17.11


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Dow Jones Can Affluent Investor Report Can Air 5.17.11

  1. 1. Voices of Wealth:Canadian Affluent Investor ReportWhat high-net-worth investors say they want fromadvisers, brokers and information sources.
  2. 2. Canadian Affluent Investor ReportIn a recovering market, the most important asset that advisers and wealth managers canoffer their clients is this: meaningful financial insight. The critical decisions advisers make andthe guidance they offer clients to help them prosper must be informed by timely intelligenceon breaking events and emerging market developments. These are the basis for confidence-inspiring insight. More importantly, decisions that result must be based on reliable information.What Advisers Should Know Who Participated In The Study?What’s expected of advisers is clear. But how well do these The online study was conducted in October 2010 amongexpectations match the desires and needs of their clients? a random sample of Canadian affluent investors, obtainedSince 2002, Dow Jones has commissioned independent, from an external customer panel. The panel was not awarebiennial studies of affluent investors in the United States that Dow Jones had commissioned the uncover what they read, what they want and what theyexpect from their advisers and wealth managers. In 2010, • Minimum age for participation was 25 years old.we expanded the study to include research on affluent • Majority of participants (66%) were 50 or older.investors in Canada. The qualifying financial threshold was $250,000 or moreThis report reflects the results of the Canadian study in investable assets such as stocks, bonds, mutual funds,completed in October 2010 by the independent firm etc., excluding retirement vehicles, such as RSP plans.Opinion Research Corporation, based in Princeton, Extrapolating results across the population of CanadianN.J. The study targeted a random sample of Canadian affluent investors yields a +/- 6.7% margin of error at theaffluent investors age 25 or older with at least $250,000 in 95% confidence level.investable assets (excluding RSP and other retirement plancontributions); ultimately, 209 respondents participated. Investors identified a wide variety of firms they use to help them make investment decisions, from full-serviceThis report is their voice. In the following pages, you’ll to independent to online/discount firms. About 50% uselearn more about who they are and what they expect. more than one type of firm.You’ll see that their opinions on the quality of various newsservices are remarkably consistent. In addition, you’ll find By the designated field closing date in October 2010, 209a few suggestions for improving your contact strategy with affluent investors had participated in the study. Here’s asurvey input that can help you focus your communications snapshot of who they are:on the issues that matter to your most important audience:affluent investors. ASSETS: • $250,000 - $999,999: 70% • $1 million - $2,999,999: 19%High Points At A Glance: • $3 million or more: 10%• Primary source for helping investors make investment HOUSEHOLD INCOME: decisions: The Globe & Mail • $99,999 or less: 13%• Highest-ranked financial news source for credibility, • $100,000 - $249,999: 55% accuracy, trustworthiness and usefulness: The Wall • $250,000 or more: 32% Street Journal AGE:• News source respondents most prefer their adviser/ • 49 and under: 33% wealth manager to use: Dow Jones • 50 and over: 66% EDUCATION: University or Higher Degree: 82% You might select a news service for your advisers’ needs. But what about your clients? Page 2
  3. 3. Canadian Affluent Investor Report Affluent households own a wide variety of assets and investments, and mo Goals of the Study Figure 2: Assets/Investments Owned investments like stocks and mutual funds. Respondent assets represented a wide range of investments, led The aim of the 2010 Canadian Affluent Investor Study was to Assets/Investments Owned by Household by stocks, mutual funds, CDs and bonds. gain a better understanding of opportunities within three key investment firm categories: Full Service, Independent and Stocks Online/Discount investment firms. Mutual Funds Money Market Funds Specifically, the study’s key objectives were to: Bonds (excluding Government Securities) Certificates of Deposit (CDs) • Identify affluent investors’ primary sources of financial Real Estate Investment Trusts (REITs) news, information and advice (figure 1) Exchange Traded Funds (ETFs) • Assess investors’ perceptions of news and information Government Securities/Treasuries Non-Domestic Stocks (ADRs, GDRs, etc.) services Optionsir primary source, investors’ relationships with their firm cited. One-quarter of affluent Futures (stock, currency, etc.) • Explore Globe & Mail is the most frequently and adviserrs use Globe Mail as their primary source, 11% rely on their brokerage firm’s website Alternative Investments use any • Gauge investors’ usage of, and satisfaction with, online/ Dow Jones brand. Commodities discount services Annuities Variable/Fixed Primary Source of Financial News Used to Help Inform Investment Decisions Hedge Funds Total Figure 1: Primary Source of Financial News IRAs Unit Investment Trusts (UITs) Globe & Mail Other Foreign Investments Your brokerage firm’s website Other Investments Any Dow Jones Brand Q1. Please indicate which of the following types of assets/investments, excluding retirement savings plans (RSPs), you or othe ROB-TV household now own. Select all that apply. National Post Not only do they want a more collaborative relationship with Base: Total (n=209) Yahoo! Finance advisers and wealth managers, but they are choosing more Wall Street Journal independent channels through which to invest. In fact, close Bloomberg News to a third of affluent investors use independent firms. CNBC Sources with < 2%: Morningstar Barron’s Affluent investors seek out sources with the highest quality Dow Jones Big Charts financial information—and expect their advisers/wealth managers to do the same. Business Week MarketWatch Forbes Associated Press CNN Money MSN Money “ ffluentinvestorsarechoosingmore A Financial Times Fox Business News Toronto Star Smart Money independentchannelsthroughwhich Fortune Google Finance Motley Fool toinvest...” Reuters Thomson TMX Money Investor’s Business Daily Which one do you consider to be your PRIMARY source of financial news to help inform your investment decisions?Total (n=209) Key Insightones brand comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts. 13 The 2010 Canadian Affluent Investor Study suggests that the majority of affluent investors, who own a wide array of investments (figure 2), often turn to advisers in full-service and independent firms when making financial decisions. In addition, 61% of affluent investors rely on their adviser when seeking financial or investment advice. Page 3
  4. 4. Canadian Affluent Investor Report What news sources emerged as most important? WhenTypes of Firms Affluent Investors Use asked to identify the financial news sources they use toThe majority of investors surveyed use Full Service firms inform investment decisions, respondents cited The Globe (81%). Close to three-quarters of respondents consider Mail most often (56%), followed by “Any Dow Jones Brand”full-service firms as their primary investment firm type with 43%. Dow Jones led the next most popular choice (The(71%). Still, half of these investors have used multiple firms National Post at 34%) by 9 percentage points, and the next(including Independent and Online/Discount firms) but only a financial news media, Bloomberg (23%), by 20 percentagesmall minority (10%) consider Online/Discount firms as their of these affluent investors use Globe Mail. Slightly fewer than one-half use a The majority points (figure 5).Half of these investors use more than one financial services firm. And, full service firms areprimary choice (figure 3). using independent or online/discount firms. brand of financial news to help inform their investment decisions.most commonly used with far fewer Dow Jones Figure 5: Any Sources of Financial News Used to HelpFigure 3: Types of Investment Firms Used Used Types of Investment Firms Any Sources of Financial News Decisions Inform Investment Used to Help Inform Investment Decisions Total Any Primary Globe Mail Any Dow Jones brand National Post Brokerage firm’s website Full Service Bloomberg News Dow Jones Wall Street Journal Business Week CNN Money Independent ROB-TV Yahoo! Finance Financial Times Sources with 5%: CNBC MSN Money Morningstar ThomsonOnline/Discount TMXMoney Toronto Star Big Charts MarketWatch Barron’s Forbes Smart Money 50% use multiple firms Associated Press Investor’s Business Daily Q4a/l. During the past 6 months, with which of the following financial services firms have you invested or traded? Select all that apply. Google Finance The Q4B. Which one of these firms would you consider to be your primary investment firm? 0 Briefing.comNews Sources Affluent Investors Trust Base: Q4 (n=194) Q4I (n=177) Fortune Fox Business News ReutersIt’s not surprising that financial advisers/brokers were the top The Motley Foolsource of investment advice for affluent investors (figure 4).of these sources of financial news do you use to help inform your investment decisions? Select all that apply. Q13A. Which Base: Total (n=202)And given several choices, a significant number of investors comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts. Dow Jones brand 12indicated that they prefer their adviser use Dow Jones as the “ alfoftheinvestorsinthisreportuse Hsource of information when providing investment for financial and guidance. Affluent investors are, by far, most likely to rely on an advisor/broker investment advice. Many also use news and info websites and business/financial multiplefirmsfortheirinvestmentsbut publications.Figure 4: Sources of Investment Advice Sources Rely on for Financial or Investment Advice only10%consideronline/discount Total firmsastheirprimarychoice...” Rely On Rely on Most Financial Adviser/BrokerNews and Information WebsitesBusiness/Financial Publications My Brokerage Firms Website Financial TV Programming Financial Planner Colleague/Friend Spouse/Other Family Member Accountant/CPA Other Q10. Which of the following do you rely on for financial or investment advice? Select all that apply. Q11. Which do you rely on most for financial or investment advice? 11 Base: Total (n=209) Page 4
  5. 5. Canadian Affluent Investor Report Significantly more affluent investors prefer their broker/advisor use Dow Jon other financial news sources when advising them on investment decisions. Financial News Source Prefer Advisor/Broker Use - Among those who have a financial advisor/broker at a full-service or inde Figure 7: Financial News Source Investors Prefer Key Insight Adviser/Broker Use When asked which source they would choose if they were restricted to just one for financial news nearly a third of Dow Jones the randomly selected participants in the 2010 Canadian Affluent Investor Study (30%) chose The Globe Mail as their source for financial news, with “Any Dow Jones Bloomberg Brand” following (19%). Other competing financial newsuld only use one news source for financial news, nearly one-third of affluent sources trailed, with Yahoo! Finance at 7%, Bloomberg would choose Globe Mail and a fifth would choose a Dow Jones Brand. News at 6%, Financial Times at 5%, and all others at less Reuters than 5% (figure 6). Financial News Source of Choice Total Figure 6: Financial News Source of Choice Yahoo! Finance Globe Mail Any Dow Jones Brand The Wall Street Journal Yahoo! Finance Google Finance ROB-TV Measurable Value National Post Bloomberg News Respondents rated eight financial news sources they knew well Q20. And which of these financial news sources would you prefer your broker or financial advisor use when they are advising you Dow Jones decisions? on a five-point scale from Poor to Excellent. The Wall Street Financial Times Journal was rated Excellent/Very Good by 58%, while next-best Base: Use full-service or independent firm and have a broker/financial advisor (n=126) Sources with 2%: MarketWatch was rated Excellent/Very Good by 51% (figure 8). Morningstar Market Watch CNN Money CNBC Toronto Star Figure 8: OverallThe Wall Street Journal and MarketWatch an “Excellent” or “Very Good” More than half give overall rating. Rating for Financial News Sources Reuters Big Charts Among those who are somewhat, very or extremely familiar with Google Finance Overall Rating for Financial News Sources Forbes each source. those who are somewhat, very or extremely familiar with each source - - Among Fox Business News TMX Money “Excellent/Very Good”: 58% 51% 48% 47% 45% 40% 37% 35% 13% Excellent 19% 9% More importantly, investors clearly expect their advisers and 11% 8% 11% ould use only one of these financial news sources, which one would you choose? 9% Very Good 7%ho provided an answer (n=202) 14 wealth managers to use the news sources they themselvesand comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts. Good Fair 36% 39% 36% 29% 28% rate highly. When asked which financial news source their 40% 40% 28% Poor advisers turned to most often, investors believed Dow Jones was at the top of the list (48%), 33 percentage points ahead 33% 43% 35% 41% 42% 43% 38% 31% of second-place Bloomberg News (15%). 11% 8% 14% When asked to select the financial news service they would 16% 1% 18% 18% 19% 26% prefer their advisers/wealth managers to use when advising The Wall Market- Bloomberg- Barron’s Dow Jones Yahoo! 1% 1% Google them on investment decisions, affluent investors picked Dow Street Watch News (n=74) (n=170) Reuters Finance (n=143) Finance Journal (n=75) (n=120) (n=97) (n=167) (n=97) Jones first (47%) among the six choices, ahead of second-place Q14A. How would you rate each of the following financial news sources overall? Base: Familiar with each financial news source 16 Bloomberg News (29%) by 18 percentage points (figure 7). By every measure of value, including credibility, accuracy, trustworthiness and usefulness, investors rated The Wall The message is unambiguous: the most reliable news, Street Journal more highly than four other competing information and analysis comes from Dow Jones. sources devoted to financial news, including Bloomberg News, Yahoo! Finance, Reuters and Google Finance. For overall excellence, more than half of respondents rated The Wall Street Journal and MarketWatch Excellent and Very Good overall, ahead of Bloomberg News, Yahoo! Finance, Reuters and Google Finance. Page 5
  6. 6. Canadian Affluent Investor ReportCredibility of News Sources? Adviser Contact StrategiesWhen asked to rate the credibility of news sources, the survey The 2010 Canadian Affluent Investor Study suggests greaterrevealed that The Wall Street Journal was rated more highly opportunities for advisers and wealth managers to increasethan competitors, with Excellent / Very Good ratings of 58%. both the volume and value of their client contacts.The next two rated most credible were Bloomberg (56%) andDow Jones (52%) (figure 9). When asked how frequently their advisers/wealth managers contacted them, more than half of respondentsFigure 9: Street Journal Ratings for Financial News Sources The Wall Attribute enjoys better ratings than all other financial news sources on (56%) reported 1-4 contacts in the last six months (figureAmong those who are somewhat, very or extremely familiar with across all measures. 10). Only 14% reported 10 or more contacts in the giveneach source. Attribute Ratings for Financial News Sources - Among those who are somewhat, very or extremely familiar with each source - six-month period. The most prevalent mode of contact is 58% 56% 52% Excellent/Very Good by telephone, at 76%, with email the second-most popular Credibility 30% 44% 25% method at 59%. Almost all have been contacted by their financial advisor/broker in the past six months, most often between one and four times. 57% Figure 10: Number of Times Contacted by Financial Adviser/ 43% 44% 31% 39% Broker in Past Six Months Among those who have an adviser/broker at a full service or Six Months Number of Times Contacted by Financial Advisor/Broker in Past 25% Accuracy independent firm have an advisor/broker at a full-service or independent firm - - Among those who 57% 49% 46% 41% 33%Trustworthiness 24% None 43% 39% 39% 40% 29% 29% Usefulness The Google 1-4 times Bloomberg Yahoo! Wall Street Dow Jones Reuters Finance News Finance Journal (n=92) (n=67) (n=46) (n=96) (n=59) (n=55) Q14B. How would you rate the following financial news source on these dimensions? Base: Familiar with each financial news source 0 5-9 timesHow Can Advisers Improve TheirClient Relationships? 10 times or moreOverall, the 2010 Canadian Affluent Investor Study offersadvisers and wealth managers great news and insightsthat can help them improve client relationships. More When asked for their preferred topics of discussion,than six in 10 respondents (61%) indicated that they respondents cited retirement planning, tax strategies,were either Extremely Satisfied or Very Satisfied with their diversifying the times they have sent you financial statements. Please do not include investments, estate planning and alternative Q23. Approximately how many times in the past 6 months has your financial advisor/broker at [FIRM] contacted you (either in person, by phone, or e-mail). 25adviser or wealth manager (17% and 44%, respectively). investments, in that order, as the subjects of greatest interest Base: Use full-service or independent firm and have an advisor (n=124)And more respondents cited advisers/wealth managers (figure 11).as the source they turned to for investment advice thanany other single source (61%). Figureare most likely to get or be interested in getting advice from their advisor/broker on They 11: Topics Advised On/Would Like To Be Advised On retirement planning, tax strategies and diversifying investments. Among those who have a financial adviser/broker at a full serviceAlthough advisers should be pleased with these or independent firm Advised On/Would Like To Be Advised On Topicsnumbers, they are no cause for complacency. There - Among those who have a financial adviser/broker at a full-service or independent firm - Currently/interested in being advised:are still areas that could be better served. The majority 70% 69% 64% 48% 46% 42% 31% 19% 18% 16% 10% 9%of respondents (66%) are 50 or older, but 44% of allrespondents have not developed a retirement plan withtheir adviser. Fully 19% of respondents have had nocontact at all with an adviser in the past six months.And one-third of investors (33%) reported they were only 13%Somewhat Satisfied with their adviser. Because the most 13%satisfied clients tend to entrust advisers/wealth managerswith more assets, advisers who would like to increasetheir book of assets under management need strategies Retirement Planning Tax Diversifying Strategies Investment Estate Planning Alternative Emerging Investments Markets Regulatory Changes Education Planning Long-term Care Charitable Giving Elder Care My Business/ Professionto help them shift more clients from Somewhat Satisfied Currently Interestedto Very Satisfied. Q29. Does your financial advisor/broker currently advise you on any of the following topics? Select all that apply. Q30. Which of the following topics would you like your financial advisor/broker to discuss with or advise you on? Select all that apply. 22 Base: Use full-service or independent firm and have an advisor (n=126) Page 6
  7. 7. Canadian Affluent Investor Report Sixty-seven percent of respondents said their advisers regularly send them newsletters, which more than three- Key Insight quarters of those recipients said they read regularly. Of those Advisers and wealth managers have a lot to gain by who do not receive a newsletter, more than half expressed increasing the number of contacts with clients. But to make interest in getting one from their adviser (figures 12, 13). these contacts meaningful—whether by newsletter, email, phone or in person—communications should be initiated Figure 12: Adviser/Broker Provided NewslettersMany receive newsletters from their adviser/broker and most read them ‘usually’ or ‘always’. on subjects that clients want to discuss most. Most investors read the newsletters they receive from their Adviser/Broker Provided Newsletters adviser/broker who have an adviser/broker at a full-service or independent firm - - Among those Affluent investors are more likely to contact their adviser in Regularly Receive Newsletter Frequency of Reading Newsletter search of broader advice than when making specific trades - Among those receiving newsletter from adviser/broker - (figure 14). Figure 14: Reasons for Financial Adviser/Broker Contact Do not Receive Always receive 67% 33% Among those who have an adviser/broker at a full-service or Usually independent firm Occasionally Never Most of those investors who do not receive newsletters from their financial advisor are somewhat interested in receiving them. Figure 13: Adviser/Broker Provided Newsletters Advisor/Broker Provided Newsletters Q32. Do you regularly receive a newsletter with news and insights from your financial adviser? Most- investors who have aninterest in receiving newsletters firm - Among those have an advisor/broker at a full-service or independent Q33. How often do you read the newsletter? 26 Base: Q32 - Use full-service or independent firm and have an advisor (n=119), Q33 – Use full-service or independent firm and receive newsletter (n=80) Regularly Receive Newsletter Interest in Receiving Newsletters - Among those who do not currently receive a newsletter - “Extremely/Very” interested: 22% Receive Do not 67% receive Extremely interested 33% Very interested Somewhat interested About Dow Jones Solutions For Financial Not very interested Not at all interested Services Firms Dow Jones provides actionable content and access for financial services firms that want to ensure their advisers, wealth managers, online traders, private bankers and Q32. Do you regularly receive a newsletter with news and insights from your financial advisor? investors have the most trusted, credible and timely Online Trading news and insight to drive business growth. We help Q34. How interested would you be in receiving a monthly or quarterly newsletter from your financial advisor at {FIRM) 27 Base: Q32 - Use full-service or independent firm and have an advisor (n=119) Base: Q34 - Do not receive newsletter (n=46) our customers gain greater confidence and increase Only a small portion of respondents said they invest through productivity to sustain a competitive advantage. discount or online brokerage services. In fact, nearly three- quarters of affluent investors (81%) said they manage their To learn more about Dow Jones’s Wealth investments through Full Service firms, while fewer than a Management Solutions, visit quarter (22%) invest through Discount/Online firms. This underscores the important role of advisers in the decisions made by affluent investors. By this measure, investors are clearly choosing the value of working with a trusted adviser who knows a client’s needs and can help make sense of the daily barrage of undigested market news and information. Page 7
  8. 8. Canadian Affluent Investor ReportResources You Can UseDow Jones provides these solutions to help enhance your value to high-net-worth clients. Objective Solution Dow Jones News Service (North America) Dow Jones Global Equities News (Europe, Asia/Pacific, Africa and South America) Strengthen client relationships and build business. Stay ahead Award-winning real-time corporate, economic, market, financial of the latest news and information that moves the markets and and political news, reported from nearly 90 bureaus across the affects clients’ investments and interests. globe; includes up to 19,000 items each day. Includes Dow Jones NewsPlus, an easy-to-navigate Web-based companion service offering convenient access to Dow Jones news. Dow Jones Adviser Built for the way advisers run their practice, Dow Jones’s Improve, retain and grow business by enhancing communication journalistic resources and the content of Dow Jones Newswires, with clients to gain a competitive advantage. SmartMoney, The Wall Street Journal and Barron’s are combined and easily integrated within advisers’ workflow to provide talking points, actionable data, deep analysis and sophisticated tools. Dow Jones FX Select Specialist teams of reporters, editors and translators from Hong Ensure your trade strategies take advantage of what’s affecting Kong to London to New York generate news suited to local currency trading points, minute by minute. markets by both writing original news in their language and by selecting and publishing relevant news from English editions of Dow Jones Newswires. Total Access at Dow Jones Streamline delivery of market intelligence by customizing the most An integration platform with the capability to deliver news and flexible tools for your platforms and get fast, easy access to news information in varied formats, from Widgets and Web Services on breaking events. (APIs) to low-latency newsfeeds and tablets. Learn more at with us. Get insight into major wealth management issues: Blog: Twitter: @dowjonesadviser Facebook: