MFDA report highlights crucial role in Canadian economy

Statistics showing inequality in household wealth distribution underscores need for accessible financial services

MFDA report highlights crucial role in Canadian economy

The Mutual Fund Dealers Association of Canada (MFDA) plays a central role in helping Canadian retail investors achieve their investment goals, according to a recent report from the self-regulatory organization.

In its MFDA Wealth Management Footprint report, which highlights results stemming from a broader client research project, the SRO said its members provide services to over nine million households across Canada.

“Most of these households are mass market investors defined as having $100,000 or less in financial wealth,” the report said.

Based on the data it has collected from members, the MFDA said the average financial wealth held by MFDA Member client households amounts to $75,000, with 86% of client accounts being registered accounts; nearly four fifths (78%) of client portfolios were balanced or more conservative. Taken together, the results suggest most MFDA member clients are middle- and working-class Canadians who are investing for their retirement with a conservative investment attitude.

Citing data from the Investor Economics Household Balance Sheet report from 2019, the MFDA pointed to a national imbalance of wealth. It said that mass-market investors represent 79% of Canadian households, but hold just 4% of the country’s $4.4 trillion in financial wealth. On the other hand, affluent households make up 10% of all Canadian households, but they reportedly own 86% of the country’s total financial wealth.

“Mid-market households (those between mass market investors and affluent Canadians) represent 11% of households and own 10% of the financial wealth,” the MFDA said. “The wealth gap highlights the need for accessible financial services for all households, particularly mass market investors.”

Underscoring its outsized role in serving the mass market, the MFDA said 81% of the more than 9 million households in its members’ client base are mass market investors. And while mass market clients account for just 4% of Canada’s total financial wealth, they make up more than a quarter (26%) of MFDA financial wealth.

“There are 79,622 MFDA advisors across the country to serve investors,” the report said, noting that it embodies the largest proportion of securities advisors working with retail clients in Canada. With 94,150 securities advisors working with Canadian retail clients overall, the MFDA said its advisors represent an 85% share of that broader space.

“Investors with any level of financial wealth need both advisory services and investment products,” the MFDA said. “When looking at mass market investors, they require advice and products that are both economically accessible and appropriate for their financial needs.”


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