The Questionable Viability of Canadian FundCos

The long-term viability of Canadian investment fund managers in their current form continues its decline. This clear trend in advisor thinking continues to emerge as advisors indicate that many of Canada’s investment fund firms simply don’t have the staying power to justify their long-term support. So, what will it take to succeed and buck this trend? Credo believes innovation and leadership will be at the root of a company’s potential for success.

As part of our annual review of fund companies, Credo asked advisors to rate the asset management firms they are familiar with. One of the many statements against which we ask advisors to consider their suppliers is, “I know I can count on this company being there in the future.” Based on analysis of more than 20,000 data points provided by some 3,500 financial advisors over the last three years, Credo has found that advisors’ confidence in Canada?s investment funds industry participants will remain viable for the long haul continues to diminish significantly over time. This puts numerous industry participants at risk.

The chart presented here shows the declining industry scores from 2011 through 2013. Statistical testing of 20,899 data points reveals that there is less than a 1% chance that this decline in scoring happened by chance alone.