Internet and Financial Advisors on Equal Footing

A random survey of more than 3,000 users of globeinvestor.com and globefund.com found that the Internet has become an integral resource for these investors, often used in conjunction with the advice of a professional financial advisor. In fact, half of the survey participants who work with an advisor said that they had occasionally gone against that individual's recommendations because of information found online. The survey ran on the Web sites from January 16 to 24, and had a total of 3,041 respondents.

More than 70 per cent of the survey respondents are highly engaged investors, self-described as needing to check the performance of their investments "as frequently as I can". For most (63 per cent), that means at least once a day. Yet these investors do not depend solely on their own research. Almost half indicate that they also have a financial advisor and 43 per cent of those describe that professional as "an advisor and partner in (my) investment decisions".

"The Internet's impact on investing is a revolution, not a fad", said David Keith, Vice-President, Financial Sites for Globe Interactive, which operates globeinvestor.com and globefund.com. "Our site users are information collectors. They are taking in news, information, commentary and research from a number of sources to put it to work for them with their overall investment strategy. And the Internet is a crucial tool for them. This increasing level of self-education and self-management by some Canadian investors is impacting the strategic role that a financial advisor plays."

Thirty-five per cent of the survey respondents cited the Internet as their primary source of investment information, and 75 per cent said they had made an investment based on information found on the Internet. However, the level of trust varies from source to source with 60 per cent trusting information and advice from financial Web sites in general. Two thirds said that they trust the advice from their financial advisor. Conversely, 97 per cent do not trust information from online chat groups.

The survey found that users of globeinvestor.com and globefund.com with advisors are inclined to combine input from that advisor with independent research from the Internet. In the survey, 47 per cent said they "usually act on" the advice of their advisor, while almost as many (41.8 per cent) said they would research that advice on their own first. Half said that information gathering online had not changed their impression of their advisor, but 22.4 per cent said they were less satisfied with their advisor and 22.7 per cent said they were more satisfied.

"If a financial advisor considers the Internet a threat, they should quickly recognize that it's actually an opportunity", said Keith. "Certainly their most engaged clients are using the Internet regularly, and the opportunity exists for the advisor to leverage that behaviour to enhance the relationship and effectiveness."

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