Credo ranks and analyses companies based on the performance of competing fund companies in terms of Investor Outcomes and Canadian financial advisors’ Willingness to Support and sell the products of the companies.

Exhibit 1. The Industry Landscape: FundCos mapped on the basis of Advisors’ Willingness to Support the Company (the X-axis) and the company’s ability to produce investors who feel financially fulfilled (the Y-axis)

The analysis immediately shows which companies fall into four quadrants:

  1. Justifiable Top Performers: companies that any advisor could justify having on their product shelp
  2. Worst Performers: companies that any advisor could justify marginalizing or eliminating from their product shelf
  3. Good for Investors but Forsaken by Advisors: are the companies that produce well for investors but that are not in favour, for one reason or other, with Canada’s financial advice community
  4. Good for Advisors but Less So for Investors are the companies that have not been producing for investors but that advisors have found reason to keep on their product shelves and to support.

The data for our analysis comes from two of Credo’s ongoing research studies.

  1. The Financial Comfort Zone study (FCZ), a survey of Canadian investors and their perspectives on a variety of financial matters, and;
  2. The Credo Study (TCS), a survey of Canadian Financial Advisors and their perspectives on Canadian financial product manufacturers.

In TCS we ask advisors to identify and rate companies that they are currently working with. Similarly in the FCZ study we ask Canadian investors to identify which companies they they have managing their money and, inconspicuously, how they feel they are doing with respect to their financial goals and expectations.

Along the Y-axis (which runs North-South) we show what we refer to as “Investor Outcomes.” Higher scores are better and they fall to the top of the map. Lower score are worse; they fall near the bottom of the map. What are investor outcomes? Positive investor outcomes occur when investors indicate that they feel either ahead or well ahead of their financial expectations. Less desirable outcomes, obviously, occur when fewer investors indicate they feel ahead of the game – i.e., when they indicate they feel behind or far behind their financial expectations. So, companies are positioned North-South in the landscape based on their ability to produce an investor base that feels either ahead of the game financially or behind the 8-ball. Companies do not want to be near the bottom of the map.

Along the X-axis (which runs East to West, or left to right) , we show advisors’ “Willingness to Support” the companies in the industry. Again, higher scores are more desirable for companies. They indicate that advisors are relatively more willing to recommend these companies to their clients. Lower scores fall to the left-hand side of the map. These lower scores indicate that advisors are relatively less willing to work with these companies.

In the groups below we provide links to detailed reporting about each company in the landscape.

Justifiable Top Performers

Companies in the top right quadrant of the graphic have been producing positive outcomes for the investors who have entrusted them with the management of their investments. Further, they have generally strong relationships with the Canadian financial advice community.

Worst Performers

Companies in the bottom left quadrant of the graphic not only have relatively poor outcomes for the investors who elected to have the companies manage their investments, but also lack support from the financial advisor community. This is not to say that these companies do not have financial advisors supporting them by recommending their funds. Nor does it mean that some of the investors who have their money managed by these companies don’t feel ahead of their expectations. But, relative to other companies in the broader landscape, these companies have a base of investors who are less likely to feel ahead and who are more likely to feel behind.

Good for Investors, Forsaken by Advisors

Companies in the top left quadrant of the graphic have delivered positive outcomes for their investors but they are, for one reason or other, being relatively marginalized by the advisor community. These companies may have, in one way or other, neglected their relationship with financial advisors. The further to the left they appear, the greater the degree of marginalization. These companies are losing the battle for space on the advisor’s financial product shelf.

Good for Advisors, Less So for Investors

Companies in the bottom right quadrant of the map have been producing relatively poor outcomes among investors but have still managed to garner the support of Canada’s financial advisor community. These companies are at risk of losing the support of the advisor community if they cannot find a way to help improve investor outcomes. Companies in this quadrant are at risk of losing advisor support; they are living on borrowed time, in some respect.