Your unique insights mean a robo-advisor just can’t compete

Study confirms the special skills of financial advisors

Your unique insights mean a robo-advisor just can’t compete

It’s Valentine’s Day and financial advisors can feel the love from a new study which speaks right to the heart of the investment industry.

An analysis of 5 years of data by Advocis, the Financial Advisors Association of Canada, reveals that Canadian FAs are barometers of the broader economy as well as experts on investment and financial advice.

The Advocis Financial Advisors Index (FAI) compiled in association with Western University shows that FAs’ constant on-the-ground interactions with clients means they have a privileged perspective that allows them to remain ahead of the curve.

This unique insight means that Canadian FAs are well-placed to navigate stormy waters of market volatility, such as those experienced in the fourth quarter of 2018.

"While academic studies have consistently shown that those who receive financial advice accumulate more wealth than those who don't, the FAI data demonstrates that financial advisors have a unique vantage point on the overall direction of the economy," said Greg Pollock, President of Advocis.  "Amid all the speculation about the impact of robo-advisors on our industry, these findings demonstrate that financial advisors offer the advantage of seeing the bigger economic picture when helping their clients plan for their future financial well-being."

Expectations exceeded
The FAI is a monthly survey of 1,000 Canadian financial advisors that measures advisor confidence, defined as the degree of optimism about the state of the economy expressed by advisors and their clients through their savings, investing and risk protection activities.

"Our analysis revealed intriguing and statistically robust correlations," explained Dr. Matt Davison, Dean of Science at Western University. "The results exceeded our expectations and renewed our confidence in the value of the Financial Advisors Index as a solid, statistical indicator for the Canadian economy and corresponding investor behaviour."