A research report on Canadian millionaires shows that the wealthy are not fully satisfied with the advice and services offered by the financial services industry. Toronto-based Consulting Group tracks the profiles, attitudes and behaviors of Canadian millionaires and their financial advisors. "Close to 25,000 millionaires are on the lookout for a new financial advisor every year" said Keith Sjogren, leader of 's Wealth Management practice. "They avoid consolidation and spread their wealth across multiple providers. Millionaires are not yet content."

Market share increases for 'No Frills' banks

's Report on Mass Millionaires noted a sharp increase in market share of the alternative banks such as ING Direct and PC Financial. "The millionaires appreciate the focus on efficiency and attractive pricing. These institutions never targeted the wealthy investor but their offer has great appeal and the millionaires went after them. A complete reversal of the traditional role as the hunted have become the hunters" said Sjogren.

Almost half of millionaires profiled expect better service

The research also found that while full-service brokers remain the dominant investment advisor to the millionaire segment, only 55% of their clients said they were satisfied with their broker. As well, just over 40% of the millionaires profiled told that they now trust their own financial skills more than those of the professionals who have traditionally filled the role of primary financial advisor.

What happened? "The markets were difficult. Performance suffered but fee structures remained constant," offers Sjogren. "Net worth and appetite for investment risk decreased and, ultimately, the needs and expectations of the affluent investor shifted."

Affluent investors want more than investment ideas

Across North America, the wealth management industry has had to refocus on the basic and most fundamental aspect of their job - clearly identifying client needs, improving client contact and communication and measuring performance.

noted some trends in product preferences including a rise in interest in alternative investments such as hedge funds, real estate and private equity. Hedge funds, in particular, are becoming a mainstream holding of affluent investors, particularly for higher risk-taking sub-segments such as Entrepreneurs. Further discussions with Canada's millionaires revealed that as many millionaires own investment property as own Government Bonds.

"Financial advisors would be wise to have access to investment property specialists to ensure that they can offer expertise in other important asset categories," says Sjogren.

Despite industry consolidation, 73% of millionaires say they have not moved all of their business under one roof

The study polled opinions about Canadian financial institutions' efforts to offer clients a consolidated platform of services and advice. Are Canada's Millionaires ready to consolidate all their financial assets with one institution or advisor? "Yes and no." said Sjogren. "The Millionaire segment indicates a tentative willingness to consolidate but, so far, only 27% have taken that step. One third are concerned about limited objectivity and the focus on proprietary product. They want one aggregated statement of their holdings, fewer advisors to talk to and an overall fee that reflects the value of their entire business with that institution." The report indicates that the banks, brokerage and planning firms, counselors and insurance companies are aware of what might prompt consolidation but, to many Millionaires, most have yet to offer an attractive solution.

's discussions with Millionaires clearly show there are business opportunities for financial service providers. Millionaires want expertise, education and value offered through experienced advisors who place the well being of the client well ahead of personal or corporate objectives.

"Our research shows that some institutions are listening to their clients, reacting positively and building share. Others, however, are entrenched in traditional service and product structures and seem content to watch their market share erode."

The Consulting Group is a boutique strategy consulting firm focused exclusively on the financial services industry in Canada and the United States. To support their Wealth Management Practice, they have interviewed and profiled hundreds of wealthy Canadians. research studies are used extensively by the financial services industry as the foundation for strategy development, the determination of business opportunities, the creation of new products and the education of front-line staff.


For further information:
Keith Sjogren
Principal, The Consulting Group (416) 955-1850 x 29;

Martha Heighington
Director, The Consulting Group (416) 955-1850 x 29;

Doug Trott
President, The Consulting Group, (416) 955 1850 x 29