Disconnect Exists Over Fees

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    While investors see great value in the services provided by advisors, there are disconnects between what advisors are paid and what their clients think they are paying, says a Vanguard Investments Canada Inc. survey. “As the survey indicates, it appears investors could benefit from a clearer picture of the amount and type of compensation they pay to advisors,” says Atul Tiwari, managing director of Vanguard Investments Canada. “Advisors have an opportunity to educate investors on the value they provide in advance of the implementation of new client relationship model reforms which will mandate greater fee transparency.” Key results show that 35 per cent of investors don’t know how much they pay their advisor annually. And 83 per cent agreed or strongly agreed that their advisor’s pay is worth it, no matter how the advisor is paid. It also found advisors believe that their compensation structure is going to change over the next five to 10 years, with a shift away from commissions to fee-based compensation.