Financial advisors across the four major distribution channels included in Investment Executive‘s annual Report Card series are more than satisfied with the robust range of products their firms offer.
In particular, advisors with brokerages, mutual fund and full-service dealers, banks and insurance agencies gave their firms an overall average performance rating of 8.7 in the “quality of firm’s product offering” category – the fourth-highest such score in the Report Card series, tied with “advisor’s relationship with compliance department.”
The performance rating for product shelves is notable because the three categories that received higher ratings – “firm’s ethics,” “freedom to make objective product choices,” and “firm’s stability” – are the top three every year.
Advisors across the board lauded the diversity of the products they can choose from. Advisors at firms that have the option – or requirement – to sell in-house products boasted about the superiority of their offerings; advisors with independent firms were equally impressed with the full suite of products available to them from any producer or manufacturer.
For example, an advisor in Atlantic Canada with Toronto-based Canadian Imperial Bank of Commerce, says: “I’m 100% behind our proprietary products.”
Adds an advisor in Ontario with Toronto-based Assante Wealth Management (Canada) Ltd.: “We have very good internal products that are well thought out, executed and supported.”
Likewise, on the independent side, an advisor in Atlantic Canada with Richmond Hill, Ont.-based Global Maxfin Investments Inc. says: “There is nothing I can’t do. If there is something that’s not approved, you send an email and the firm will approve it.”
“There are so many companies we’re aligned with now,” adds an advisor in Ontario with Mississauga, Ont.-based managing general agency (MGA) IDC Worldsource Insurance Network Inc. “Back in the day, you were a captive agent; now, you can find the best product.”
In fact, IDC WIN advisors were so pleased with the range of products the MGA offers that they gave the firm the highest performance rating (9.7) in the product offering category in this year’s Report Card series.
Repeatedly, IDC WIN advisors boasted that they have access to any product they desire. For example, an IDC WIN advisor in Ontario says: “The [firm] offers all the products that I’d expect it to offer. I can’t think of any products I would want that [IDC WIN] doesn’t offer.”
Innovative products lauded
Although firms, on the whole, received commendable performance ratings in this category, the firms that stood above the rest had a product shelf that includes the latest and most innovative products. Furthermore, advisors expressed how important their firms’ anticipation of the changing needs of their clients is.
“We’re always looking for new opportunities for clients. In my opinion, product offering is the area that evolves the most – along with technology,” says an advisor in Ontario with Toronto-based RBC Dominion Securities Inc.
“The [firm is] avant gardiste,” says an advisor in Quebec with Montreal-based Peak Financial Group. “[Peak is] always ahead of the competition in product accessibility, back office and technology.”
Adds an advisor in Ontario with Toronto-based Bank of Montreal (BMO): “I think we’re very innovative at BMO. The [bank is] the first to bring [new products to market] very frequently.”
In contrast, advisors who believe their firms are outpaced by the competition and whose product shelves aren’t keeping up with the latest offerings gave their firms below-average performance ratings in the category.
“The [firm is] a bit of a dinosaur. [It’s] not quick to move on some things,” says an advisor in Atlantic Canada with Winnipeg-based Great-West Life Assurance Co.’s Gold Key distribution network. “Some of its investment products are getting better over time, but they’re hard to change at the drop of a hat.”
Adds an advisor in Quebec with Montreal-based National Bank of Canada: “We have work to do. We have to improve our product offering a bit.”
Another sore spot for some advisors were products that had higher than average management fees.
“The firm needs to stay in front of product development, and has to stay in front of costs,” says an advisor in British Columbia with Toronto-based TD Wealth Private Investment Advice.
Adds an advisor in Atlantic Canada with Mississauga-based Investment Planning Counsel Inc. (IPC): “I use third-party funds. I don’t like the products [IPC] offers in terms of performance and costs.”
However, advisors need to look at the full picture when looking at products’ costs, says Kevin Hurlburt, IPC’s executive vice president of products and services: “When we’re looking at costs, we want to make sure that the conversation is focused on all of the value-added services that an advisor and that firm can deliver to an investor, such as portfolio construction, asset allocation, rebalancing and tax-overlay management.”
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