Investors are increasingly bringing “a healthy consumer mentality to their investment portfolios,” said Vanguard chairman and chief executive Bill McNabb, speaking at a Morningstar Canada investment conference.

Changes in regulatory regimes, advisory fee structures and advice models, as well as the growing demand for low-cost exchange-traded funds are the “four forces” transforming the industry, said McNabb, and these are all driven by investor demand.

“They [investors] want to know what they are buying and how much they are paying for it. And they want to know that they can trust their investment advisors.”

Some of the steps advisors can take to build trust among their clients, according to McNabb, are:

• Plain talk: provide more transparency on fees, and clear and honest explanations about investment objectives, holdings and risk.
• Simplicity: provide products and strategies that investors can understand, and that are “built to last.”
• Lower costs: pay more attention to keeping investment costs down, so that savings can compound over time.