Every month, Advocis asks more than 1,000 members how optimistic
their clients are about the economy, what they’ve been telling clients, and
what clients have been telling them. The survey results form the basis of the
Financial Advisors Index (FAI), a mutual project between Advocis and Western
University. Now in its sixth year, the FAI has proved “a solid, statistical
indicator for the Canadian economy and corresponding investor behaviour,”
according to Dr. Matt Davidson, dean of science at Western University.
Detailed analysis of the index has yielded surprising results.
Many data points correlate strongly and even causally with general economic
indicators, including total employment, GDP, and housing prices. Evidently, the
surveyed advisors are particularly well attuned to the broader economy. This positions
them to take proactive measures with their clients when the economy gets tough,
as it did late last year.
Perhaps the results should not be surprising; advisors interact with hundreds of clients on a regular basis, exposing them not only to investor intentions, but also their behaviours. Such exposure provides financial advisors with a unique perspective on the economy, one that is sensitive to changes because of its proximity to on-the-ground decision making. The FAI shows us that financial advisors live on the leading edge of the Canadian economy, helping millions of Canadian households reach their financial goals.