Majority of financial advisers in Canada believe that a fee-based model is superior for their practices compared to a commission-based model, according to a survey report from Vanguard Canada.

The study revealed that 98% of Canadian financial advisers see a shift towards a fee-based model.

Of advisors who have migrated to a fee-based model, 86% said that it had a positive impact on client trust. The model was said to positively affect revenue growth, asset growth and client satisfaction by 77%, 73% and 72% of respondents, respectively.

Among advisers who have made the transition to a fee-based model, 39% said that their entire business is fee-based, while 32% said that they plan to become so over the next few years.

When asked what defines a successful practice for advisers, client retention and increasing assets came across as the top two issues and were cited by 31% and 27% of advisers, respectively.

Vanguard Investments Canada head of distribution Jason McIntyre said: “We are in the midst of a period of great change in the financial advice sector, driven partly by the second phase of the Client Relationship Model (CRM2) reforms requiring advisors to provide greater transparency on investment cost and compensation.

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"But this also presents an opportunity for advisors to discuss the value and benefit they provide to clients, including offering more relationship-oriented guidance rather than trying to outperform the market."