News Release

IFIC and Strategic Insight Release Industry Trends Report

Changing advisor practices, product innovations, growing business scale drive change in investment funds industry

June 6, 2019 (Toronto) – The Investment Funds Institute of Canada (IFIC) and Strategic Insight today released their report Canadian Investment Funds Industry: Recent Developments and Outlook. The report examines the current state of the investment funds industry in Canada, including trends that impact investors.

“This research demonstrates how competition and innovation in the investment funds industry meets investors’ evolving needs and preferences as they seek to achieve their financial goals,” said Paul Bourque, President and CEO, IFIC. “Investors benefit from the introduction of innovative strategies, technology investments, digital solutions, and evolving products and services.”

The report examines, at a high level, the role of investment funds in the day-to-day savings and investing activities of Canadians; the products that have been and continue to be used by savers and investors; how these products are accessed by Canadians of various levels of wealth and investment knowledge; and the changes to the investing environment that have occurred over the past decade.

Beyond the overarching demographic trends, fund product and distribution has also been influenced by: the changing nature of competition and emergence of non-traditional competitors; regulatory changes focused on investor protection; changing attitudes of investors toward risk and value as they look to preserve capital; and the ongoing impact of new technologies on all stakeholders.

“The Canadian investment fund industry is facing some challenges as it re-tools itself to deal with shifting demographics and heightened investor demands for innovative solutions, transparency and value,” said Goshka Folda, President of Investor Economics and Global Head of Research for Strategic Insight. “Our new report comments on a rapidly changing competitive environment, examines the recent wave of product and pricing innovations, as well as considers the future impact of technology on operations and delivery.”

Report Highlights:

• The move from embedded fee models to unbundled fee-based advice represents one of the most significant changes in advice delivery over the past two decades.
• Over the last 10 years, the strongest relative growth across all distribution channels has been the growth of online/discount brokerage channels and online robo-advice channels.
• Hybrid channels that combine the best elements of digital- and advisor-based channels, are set to expand at higher rates than those of the conventional advice-based networks.
• Asset allocation solutions (fund wrap programs) have gained significant market share compared to stand alone funds, as advisors delegate asset allocation, investment selection and rebalancing to professional management teams.
• Technology and the use of artificial intelligence analytics is now used in product manufacturing and is creating opportunities for better advice.
• Pressure to accelerate change through technology has been exerted through a combination of factors, including margin pressures and investor demand for greater value.

About IFIC

The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.

For more information please contact:

Carolyn Quick
Vice President, Communications and Public Affairs
cquick@ific.ca
416-309-2306