Dow Jones Can Affluent Investor Report Can Air 5.17.11

Voices of Wealth:Canadian Affluent Investor ReportWhat high-net-worth investors say they want from advisers, brokers and information sources.

Canadian Affluent Investor Report

In a recovering market, the most important asset that advisers and wealth managers can offer their clients is this: meaningful financial insight. The critical decisions advisers make and the guidance they offer clients to help them prosper must be informed by timely intelligence on breaking events and emerging market developments. These are the basis for confidence-inspiring insight. More importantly, decisions that result must be based on reliable information.

What Advisers Should KnowWhat’s expected of advisers is clear. But how well do these expectations match the desires and needs of their clients? Since 2002, Dow Jones has commissioned independent, biennial studies of affluent investors in the United States to uncover what they read, what they want and what they expect from their advisers and wealth managers. In 2010, we expanded the study to include research on affluent investors in Canada.

This report reflects the results of the Canadian study completed in October 2010 by the independent firm Opinion Research Corporation, based in Princeton, N.J. The study targeted a random sample of Canadian affluent investors age 25 or older with at least $250,000 in investable assets (excluding RSP and other retirement plan contributions); ultimately, 209 respondents participated.

This report is their voice. In the following pages, you’ll learn more about who they are and what they expect. You’ll see that their opinions on the quality of various news services are remarkably consistent. In addition, you’ll find a few suggestions for improving your contact strategy with survey input that can help you focus your communications on the issues that matter to your most important audience: affluent investors.

High Points At A Glance: • Primary source for helping investors make investment

decisions: The Globe & Mail

• Highest-ranked financial news source for credibility, accuracy, trustworthiness and usefulness: The Wall Street Journal

• News source respondents most prefer their adviser/wealth manager to use: Dow Jones

Who Participated In The Study?The online study was conducted in October 2010 among a random sample of Canadian affluent investors, obtained from an external customer panel. The panel was not aware that Dow Jones had commissioned the study.

• Minimum age for participation was 25 years old.

• Majority of participants (66%) were 50 or older.

The qualifying financial threshold was $250,000 or more in investable assets such as stocks, bonds, mutual funds, etc., excluding retirement vehicles, such as RSP plans.

Extrapolating results across the population of Canadian affluent investors yields a +/- 6.7% margin of error at the 95% confidence level.

Investors identified a wide variety of firms they use to help them make investment decisions, from full-service to independent to online/discount firms. About 50% use more than one type of firm.

By the designated field closing date in October 2010, 209 affluent investors had participated in the study. Here’s a snapshot of who they are:

ASSETS:

• $250,000 - $999,999: 70%• $1 million - $2,999,999: 19% • $3 million or more: 10%

HOUSEHOLD INCOME:

• $99,999 or less: 13%• $100,000 - $249,999: 55%• $250,000 or more: 32%

AGE:

• 49 and under: 33%• 50 and over: 66%

EDUCATION:

University or Higher Degree: 82%

You might select a news service for your advisers’ needs. But what about your clients?

Page 2


Goals of the StudyThe aim of the 2010 Canadian Affluent Investor Study was to gain a better understanding of opportunities within three key investment firm categories: Full Service, Independent and Online/Discount investment firms.

Specifically, the study’s key objectives were to:

• Identify affluent investors’ primary sources of financial news, information and advice (figure 1)

• Assess investors’ perceptions of news and information services

• Explore investors’ relationships with their firm and adviser

• Gauge investors’ usage of, and satisfaction with, online/discount services

Key InsightThe 2010 Canadian Affluent Investor Study suggests that the majority of affluent investors, who own a wide array of investments (figure 2), often turn to advisers in full-service and independent firms when making financial decisions. In addition, 61% of affluent investors rely on their adviser when seeking financial or investment advice.

Q1. Please indicate which of the following types of assets/investments, excluding retirement savings plans (RSPs), you or other members of your household now own. Select all that apply. Base: Total (n=209)

Affluent households own a wide variety of assets and investments, and mostly, traditional

investments like stocks and mutual funds.

Assets/Investments Owned by Household

6

Mutual Funds

Money Market Funds

Bonds (excluding Government Securities)

Stocks

Real Estate Investment Trusts (REITs)

Government Securities/Treasuries

Exchange Traded Funds (ETFs)

Certificates of Deposit (CDs)

Futures (stock, currency, etc.)

Non-Domestic Stocks (ADRs, GDRs, etc.)

Options

Alternative Investments

Annuities Variable/Fixed

Hedge Funds

IRAs

Other Foreign Investments

Unit Investment Trusts (UITs)

Commodities

Other Investments

Figure 2: Assets/Investments OwnedRespondent assets represented a wide range of investments, led by stocks, mutual funds, CDs and bonds.

Not only do they want a more collaborative relationship with advisers and wealth managers, but they are choosing more independent channels through which to invest. In fact, close to a third of affluent investors use independent firms.

Affluent investors seek out sources with the highest quality financial information—and expect their advisers/wealth managers to do the same.

Page 3

Q13C. Which one do you consider to be your PRIMARY source of financial news to help inform your investment decisions? Base: Total (n=209) Dow Jones brand comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts.

For their primary source, Globe & Mail is the most frequently cited. One-quarter of affluent

investors use Globe Mail as their primary source, 11% rely on their brokerage firm’s website

and 9% use any Dow Jones brand.

Primary Source of Financial News Used to Help Inform Investment Decisions Total

13

Any Dow Jones Brand

Wall Street Journal

Yahoo! Finance

Your brokerage firm’s website

National Post

Dow Jones

Bloomberg News

Morningstar

CNBC

CNN Money

Reuters

MarketWatch

TMX Money

ROB-TV

Globe & Mail

Sources with < 2%:

Barron’s

Big Charts

Business Week

Forbes

Associated Press

MSN Money

Fox Business News

Smart Money

Fortune

Motley Fool

Thomson

Investor’s Business Daily

Street.com

Briefing.com

Financial Times

Toronto Star

Google Finance

Figure 1: Primary Source of Financial News

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Page 4

Q10. Which of the following do you rely on for financial or investment advice? Select all that apply. Q11. Which do you rely on most for financial or investment advice? Base: Total (n=209)

Affluent investors are, by far, most likely to rely on an advisor/broker for financial and

investment advice. Many also use news and info websites and business/financial

publications.

Sources Rely on for Financial or Investment Advice Total

11

News and Information Websites

Business/Financial Publications

My Brokerage Firm's Website

Financial Adviser/Broker

Financial Planner

Accountant/CPA

Colleague/Friend

Financial TV Programming

Other

Rely On Rely on Most

Spouse/Other Family Member

Figure 4: Sources of Investment Advice

0

Q4a/l. During the past 6 months, with which of the following financial services firms have you invested or traded? Select all that apply. Q4B. Which one of these firms would you consider to be your primary investment firm? Base: Q4 (n=194) Q4I (n=177)

Half of these investors use more than one financial services firm. And, full service firms are

most commonly used with far fewer using independent or online/discount firms.

Types of Investment Firms Used

Any

Full Service

Independent

Online/Discount

Primary

50% use multiple firms

Figure 3: Types of Investment Firms Used

Types of Firms Affluent Investors Use The majority of investors surveyed use Full Service firms (81%). Close to three-quarters of respondents consider full-service firms as their primary investment firm type (71%). Still, half of these investors have used multiple firms (including Independent and Online/Discount firms) but only a small minority (10%) consider Online/Discount firms as their primary choice (figure 3).

News Sources Affluent Investors TrustIt’s not surprising that financial advisers/brokers were the top source of investment advice for affluent investors (figure 4). And given several choices, a significant number of investors indicated that they prefer their adviser use Dow Jones as the source of information when providing investment guidance.

What news sources emerged as most important? When asked to identify the financial news sources they use to inform investment decisions, respondents cited The Globe & Mail most often (56%), followed by “Any Dow Jones Brand” with 43%. Dow Jones led the next most popular choice (The National Post at 34%) by 9 percentage points, and the next financial news media, Bloomberg (23%), by 20 percentage points (figure 5).

Q13A. Which of these sources of financial news do you use to help inform your investment decisions? Select all that apply. Base: Total (n=202) Dow Jones brand comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts.

The majority of these affluent investors use Globe & Mail. Slightly fewer than one-half use a

Dow Jones brand of financial news to help inform their investment decisions.

Any Sources of Financial News Used to Help Inform Investment Decisions Total

12

Brokerage firm’s website

Bloomberg News

Dow Jones

National Post

Wall Street Journal

ROB-TV

CNN Money

Business Week

Yahoo! Finance

Toronto Star

Morningstar

MarketWatch

Forbes

Google Finance

Reuters

The Motley Fool

Fortune

Associated Press

Globe & Mail

Any Dow Jones brand

Sources with < 5%:

MSN Money

Thomson

TMXMoney

Big Charts

Barron’s

Smart Money

Investor’s Business Daily

The Street.com

Briefing.com

Fox Business News

Financial Times

CNBC

Figure 5: Any Sources of Financial News Used to Help Inform Investment Decisions

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Page 5

Q20. And which of these financial news sources would you prefer your broker or financial advisor use when they are advising you on investment decisions?

Base: Use full-service or independent firm and have a broker/financial advisor (n=126)

Significantly more affluent investors prefer their broker/advisor use Dow Jones than

other financial news sources when advising them on investment decisions.

Financial News Source Prefer Advisor/Broker Use - Among those who have a financial advisor/broker at a full-service or independent firm -

19

Dow Jones

Yahoo! Finance

The Street.com

Google Finance

Bloomberg

Reuters

Figure 7: Financial News Source Investors Prefer Adviser/Broker Use

Key InsightWhen asked which source they would choose if they were restricted to just one for financial news nearly a third of the randomly selected participants in the 2010 Canadian Affluent Investor Study (30%) chose The Globe & Mail as their source for financial news, with “Any Dow Jones Brand” following (19%). Other competing financial news sources trailed, with Yahoo! Finance at 7%, Bloomberg News at 6%, Financial Times at 5%, and all others at less than 5% (figure 6).

More importantly, investors clearly expect their advisers and wealth managers to use the news sources they themselves rate highly. When asked which financial news source their advisers turned to most often, investors believed Dow Jones was at the top of the list (48%), 33 percentage points ahead of second-place Bloomberg News (15%).

When asked to select the financial news service they would prefer their advisers/wealth managers to use when advising them on investment decisions, affluent investors picked Dow Jones first (47%) among the six choices, ahead of second-place Bloomberg News (29%) by 18 percentage points (figure 7).

The message is unambiguous: the most reliable news, information and analysis comes from Dow Jones.

Measurable ValueRespondents rated eight financial news sources they knew well on a five-point scale from Poor to Excellent. The Wall Street Journal was rated Excellent/Very Good by 58%, while next-best MarketWatch was rated Excellent/Very Good by 51% (figure 8).

By every measure of value, including credibility, accuracy, trustworthiness and usefulness, investors rated The Wall Street Journal more highly than four other competing sources devoted to financial news, including Bloomberg News, Yahoo! Finance, Reuters and Google Finance. For overall excellence, more than half of respondents rated The Wall Street Journal and MarketWatch Excellent and Very Good overall, ahead of Bloomberg News, Yahoo! Finance, Reuters and Google Finance.

Google Finance (n=97)

Q14A. How would you rate each of the following financial news sources overall? Base: Familiar with each financial news source

More than half give The Wall Street Journal and MarketWatch an “Excellent” or “Very Good”

overall rating.

Overall Rating for Financial News Sources - Among those who are somewhat, very or extremely familiar with each source -

16

Excellent

Very Good

Fair

Poor

Good

1%

“Excellent/Very Good”: 58% 48% 51% 47% 45% 40% 37% 35%

The Wall Street Journal (n=167)

Market-Watch (n=75)

Barron’s (n=74)

Dow Jones (n=170) Reuters

(n=143)

Bloomberg-News

(n=120)

Yahoo! Finance (n=97)

11% 16%

8% 18% 14%

18% 19% 26%

31% 33% 43%

35% 41% 42% 43%

38%

40% 40%

36% 39%

36% 29% 28%

28%

19% 11%

13%

8% 9%

11% 9% 7%

1% 1%

Figure 8: Overall Rating for Financial News SourcesAmong those who are somewhat, very or extremely familiar with each source.

Figure 6: Financial News Source of Choice

Q15A. If you could use only one of these financial news sources, which one would you choose? Base: Total who provided an answer (n=202) Dow Jones brand comprised of The Wall Street Journal, Dow Jones, MarketWatch, Barron’s, Smart Money and Big Charts.

If they could only use one news source for financial news, nearly one-third of affluent

investors would choose Globe & Mail and a fifth would choose a Dow Jones Brand.

Financial News Source of Choice Total

14

ROB-TV

Dow Jones

Google Finance

National Post

Yahoo! Finance

Any Dow Jones Brand

Bloomberg News

Financial Times

CNBC

TMX Money

Morningstar

Wall Street Journal

Globe & Mail

Sources with < 2%:

Market Watch

CNN Money

Toronto Star

Reuters

Big Charts

Forbes

Fox Business News


25

Q23. Approximately how many times in the past 6 months has your financial advisor/broker at [FIRM] contacted you (either in person, by phone, or e-mail). Please do not include the times they have sent you financial statements.

Base: Use full-service or independent firm and have an advisor (n=124)

Number of Times Contacted by Financial Advisor/Broker in Past Six Months - Among those who have an advisor/broker at a full-service or independent firm -

Almost all have been contacted by their financial advisor/broker in the past six months,

most often between one and four times.

1-4 times

None

5-9 times

10 times or more

Figure 10: Number of Times Contacted by Financial Adviser/Broker in Past Six MonthsAmong those who have an adviser/broker at a full service or independent firm

Page 6

Credibility of News Sources? When asked to rate the credibility of news sources, the survey revealed that The Wall Street Journal was rated more highly than competitors, with Excellent / Very Good ratings of 58%. The next two rated most credible were Bloomberg (56%) and Dow Jones (52%) (figure 9).

How Can Advisers Improve Their Client Relationships?Overall, the 2010 Canadian Affluent Investor Study offers advisers and wealth managers great news and insights that can help them improve client relationships. More than six in 10 respondents (61%) indicated that they were either Extremely Satisfied or Very Satisfied with their adviser or wealth manager (17% and 44%, respectively). And more respondents cited advisers/wealth managers as the source they turned to for investment advice than any other single source (61%).

Although advisers should be pleased with these numbers, they are no cause for complacency. There are still areas that could be better served. The majority of respondents (66%) are 50 or older, but 44% of all respondents have not developed a retirement plan with their adviser. Fully 19% of respondents have had no contact at all with an adviser in the past six months. And one-third of investors (33%) reported they were only Somewhat Satisfied with their adviser. Because the most satisfied clients tend to entrust advisers/wealth managers with more assets, advisers who would like to increase their book of assets under management need strategies to help them shift more clients from Somewhat Satisfied to Very Satisfied.

Adviser Contact StrategiesThe 2010 Canadian Affluent Investor Study suggests greater opportunities for advisers and wealth managers to increase both the volume and value of their client contacts.

When asked how frequently their advisers/wealth managers contacted them, more than half of respondents (56%) reported 1-4 contacts in the last six months (figure 10). Only 14% reported 10 or more contacts in the given six-month period. The most prevalent mode of contact is by telephone, at 76%, with email the second-most popular method at 59%.

When asked for their preferred topics of discussion, respondents cited retirement planning, tax strategies, diversifying investments, estate planning and alternative investments, in that order, as the subjects of greatest interest (figure 11).

Dow Jones (n=92)

43% 39% 39% 40%

29% 29%

The Wall Street

Journal (n=96)

58% 56% 52%

30%

44%

25%

Bloomberg News (n=59)

57%

43% 44%

31% 39%

25%

Q14B. How would you rate the following financial news source on these dimensions? Base: Familiar with each financial news source

The Wall Street Journal enjoys better ratings than all other financial news sources on across all measures.

Attribute Ratings for Financial News Sources

- Among those who are somewhat, very or extremely familiar with each source -

0

Trustworthiness

Credibility

Accuracy

Usefulness

Excellent/Very Good

57% 49%

46%

33% 41%

24%

Yahoo! Finance (n=55)

Reuters (n=67)

Google Finance (n=46)

Figure 9: Attribute Ratings for Financial News SourcesAmong those who are somewhat, very or extremely familiar with each source.

Q29. Does your financial advisor/broker currently advise you on any of the following topics? Select all that apply. Q30. Which of the following topics would you like your financial advisor/broker to discuss with or advise you on? Select all that apply. Base: Use full-service or independent firm and have an advisor (n=126)

They are most likely to get or be interested in getting advice from their advisor/broker on

retirement planning, tax strategies and diversifying investments.

Topics Advised On/Would Like To Be Advised On - Among those who have a financial adviser/broker at a full-service or independent firm -

22

13% 13%

Currently/interested in being advised:

70% 31% 64% 69% 46% 48% 19% 42% 16% 18% 10% 9%

Retirement Planning

Diversifying Investment

Tax Strategies

Estate Planning

Emerging Markets

Alternative Investments

Regulatory Changes

Education Planning

Charitable Giving

My Business/ Profession

Long-term Care

Elder Care

Interested Currently

Figure 11: Topics Advised On/Would Like To Be Advised OnAmong those who have a financial adviser/broker at a full service or independent firm


Page 7

27

Q32. Do you regularly receive a newsletter with news and insights from your financial advisor? Q34. How interested would you be in receiving a monthly or quarterly newsletter from your financial advisor at {FIRM) Base: Q32 - Use full-service or independent firm and have an advisor (n=119) Base: Q34 - Do not receive newsletter (n=46)

Interest in Receiving Newsletters - Among those who do not currently receive a newsletter -

Most of those investors who do not receive newsletters from their financial advisor are

somewhat interested in receiving them.

“Extremely/Very” interested: 22%

Regularly Receive Newsletter

Advisor/Broker Provided Newsletters - Among those who have an advisor/broker at a full-service or independent firm -

Extremely interested

Very interested

Not very interested

Not at all interested

Somewhat interested

Do not

receive

33%

Receive

67%

Figure 13: Adviser/Broker Provided NewslettersMost investors have an interest in receiving newsletters

Figure 14: Reasons for Financial Adviser/Broker ContactAmong those who have an adviser/broker at a full-service or independent firm

Sixty-seven percent of respondents said their advisers regularly send them newsletters, which more than three-quarters of those recipients said they read regularly. Of those who do not receive a newsletter, more than half expressed interest in getting one from their adviser (figures 12, 13).

Online TradingOnly a small portion of respondents said they invest through discount or online brokerage services. In fact, nearly three-quarters of affluent investors (81%) said they manage their investments through Full Service firms, while fewer than a quarter (22%) invest through Discount/Online firms. This underscores the important role of advisers in the decisions made by affluent investors.

By this measure, investors are clearly choosing the value of working with a trusted adviser who knows a client’s needs and can help make sense of the daily barrage of undigested market news and information.

Key InsightAdvisers and wealth managers have a lot to gain by increasing the number of contacts with clients. But to make these contacts meaningful—whether by newsletter, email, phone or in person—communications should be initiated on subjects that clients want to discuss most.

Affluent investors are more likely to contact their adviser in search of broader advice than when making specific trades (figure 14).

About Dow Jones Solutions For Financial Services Firms Dow Jones provides actionable content and access for financial services firms that want to ensure their advisers, wealth managers, online traders, private bankers and investors have the most trusted, credible and timely news and insight to drive business growth. We help our customers gain greater confidence and increase productivity to sustain a competitive advantage.

To learn more about Dow Jones’s Wealth Management Solutions, visit dj.com/wealthmanagement

26

Q32. Do you regularly receive a newsletter with news and insights from your financial adviser? Q33. How often do you read the newsletter? Base: Q32 - Use full-service or independent firm and have an advisor (n=119), Q33 – Use full-service or independent firm and receive newsletter (n=80)

Many receive newsletters from their adviser/broker and most read them ‘usually’ or ‘always’.

Do not

receive

33%

Receive

67%

Regularly Receive Newsletter

Always

Usually

Frequency of Reading Newsletter

- Among those receiving newsletter from adviser/broker -

Occasionally

Never

Adviser/Broker Provided Newsletters - Among those who have an adviser/broker at a full-service or independent firm -

Figure 12: Adviser/Broker Provided NewslettersMost investors read the newsletters they receive from their adviser/broker


Resources You Can UseDow Jones provides these solutions to help enhance your value to high-net-worth clients.

Connect with us. Get insight into major wealth management issues: Blog: financialadviserblog.dowjones.com

Twitter: @dowjonesadviser

Facebook: www.facebook.com/dowjonesadviser

Objective Solution

Strengthen client relationships and build business. Stay ahead of the latest news and information that moves the markets and affects clients’ investments and interests.

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Improve, retain and grow business by enhancing communication with clients to gain a competitive advantage.

Dow Jones Adviser Built for the way advisers run their practice, Dow Jones’s journalistic resources and the content of Dow Jones Newswires, SmartMoney, The Wall Street Journal and Barron’s are combined and easily integrated within advisers’ workflow to provide talking points, actionable data, deep analysis and sophisticated tools.

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Total Access at Dow JonesAn integration platform with the capability to deliver news and information in varied formats, from Widgets and Web Services (APIs) to low-latency newsfeeds and tablets. Learn more at dj.com/products/widgets_web_services

Dow Jones Can Affluent Investor Report Can Air 5.17.11

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