What are Credo WIBO Reports?

WIBO stands for “Whose Investors are Better Off?” and WIBO reports are a tool for use by Canadian financial advisors and their investors.  The tool enables people to explore the difference in investor outcomes that are delivered by different financial institutions. They are based on ongoing research with the Canadian investor community.  Credo has surveyed more than 35,000 investors in order to establish a data set that enables these analyses.

Findings

CI produces more desirable investor outcomes than SLGI.  The evidence is laid out below.

Credo studied a subset of investors from our complete data set.  This analysis included more than 2,300 investors in an exercise that compared the investor outcomes of the users of CI’s funds with the investor outcomes of the users of SLGI’s funds.

  • 1,525 users of CI Investments; and
  • 1,121 users of Sun Life Global Investments

We asked them a host of questions. One question, in particular,  is used to represent investor outcomes:

“Which of the following best characterizes how you feel?

1. I am far behind where I expected to be financially.
2. I am behind where I expected to be financially.
3. I am about where I expected to be financially.
4. I am ahead of where I expected to be financially.
5. I am well ahead of where I expected to be financially.

 

(Note: Credo does not ask investors if their financial condition is related to their choice of asset managers in any way. Rather, we are able to infer this through analysis of related data.)

Exhibit 1 below shows the high-level results. Reviewing this graphical analysis, it appears that the distributions we found are very similar. Statistical testing produces evidence that we can rule out that real differences between the two companies’ investor outcomes didn’t happen by chance alone.

Exhibit 1. Comparing How Investors Feel: CI Investments vs Sun Life Global Investments

Investors who elected to invest with CI funds are more or likely to feel that they are ahead of their expectations than are investors who elected to have Sun Life Global Investments manage their money.  Further, they are less likely to feel behind or far behind financially relative to Sun Life Global Investments’ users.  The probability that there is no real difference between CI’s investor outcomes and SLGI’s investor outcomes and that these results happened by chance alone is p=0.0002. The calculation of this is presented in Exhibit 2.

Exhibit 2. Detailed test of independence (Chi Squared) analysis comparing CI investors outcomes with SLGI’s investor outcomes.

Highlights

Some highlights from this research:

  1. SLGI investors were more likely than CI investors to feel behind their financial expectations. When pooled, or taken as a group together, about 26% of these two companies’ investors would be expected to feel behind their expectations. (Note that Credo’s research found that 28% of Canadian investors, generally, would be expected to feel behind their expectations.) CI does better than that with respect to investor outcomes; only 23% of their investors indicate feeling behind their expectations.  By contrast, 29% of SLGI investors indicated that they feel behind their expectations.
  2. Pooled, or taken as a group, about 12% of each company’s clients would be expected to feel far behind their financial expectations.  By contrast, 15% of Canadian investors in general indicate that they feel far behind their expectations.  Both CI and SLGI do better than that with respect to investor outcomes. However, CI has only 10% of its investors claiming to feel far behind their expectations.  SLGI has 13% of its investors claiming to feel far behind their financial expectations.
  3. CI investors were more likely to feel ahead of their financial expectations than investors who had opted for SLGI. Considered together as a pool, both companies should have expected to have about 18% of their clients indicate that they feel ahead of their financial expectations. By contrast, only 12% of Canadian investors in general indicate that they feel ahead of their expectations.  Both CI and SLGI do better than that with respect to investor outcomes, but there is a difference between the two, in any case.  20% of CI’s investors feel ahead of the game while only 15% of SLGI’s investors feel ahead. This is the source of much of the significance in the difference between CI and SLGI (note the red-highlighted contribution of this component in the decomposition of the Chi Squared statistic above, in exhibit 2.)
  4. About 4% of both companies’ investors would be expected to feel well ahead of their financial expectations while only about 3% of Canadian investors in general indicate that they feel well ahead of their expectations.  Both CI and SLGI do better than that with respect to investor outcomes.
  5. About 41% of each company’s investors would be expected to indicate that they feel on par with their financial expectations.  This is consistent with what Credo found in the investor population overall.

This offers sufficient evidence that, given the choice of recommending either SLGI or CI funds, a financial advisor might want to select CI rather than SLGI on the basis of investor outcomes.  Both companies produce investor outcomes that are better than the outcomes experienced by Canadian investors in general, however.  Also, Credo appreciates that, in deciding what companies instruments to use, factors beyond investor outcomes are taken into consideration by advisors.

Note

This research was NOT funded by either CI or SLGI.  It was conducted independently and objectively by Credo Consulting Inc. without prejudice.

If you have questions about this or other Credo research, your welcome to call us.