At first blush, the results of this year’s Report Card series revealed that many financial advisors are happy. Books of business are growing and satisfaction levels with several of their firms are on the rise. But much of this glow is clouded by the fact that advisors still have to jump over hurdles in order to receive the essential services they require to run their businesses.
In particular, advisors pointed to concerns regarding their “back office and administrative support,” “technology tools and advisor desktop” and their “firm’s receptiveness to advisor feedback.” This frustration was evident in the large “satisfaction gaps” – the difference between the overall average performance rating and overall average importance rating that advisors bestowed on a category – for these three categories.
As a matter of fact, all three categories had a satisfaction gap of a full point or more. And these differences, which already were notable in previous years, widened in 2013 – meaning that the firms still haven’t dealt with the issues that concern their advisors the most.
“Technology tools are no better than they were 15 years ago,” says an advisor in Ontario with Toronto-based CIBC Wood Gundy. “They keep telling us it’s getting better, but it’s only improving in small increments. New recruits see our technology and they think it’s ridiculous.”
Adds an advisor in the same province with Montreal-based National Bank Financial Ltd. about his firm’s receptiveness to advisor feedback: “The firm gives empty promises, and decisions are predetermined. They humor advisors by asking for opinions, but they never follow through.”
Advisors across all four channels of the financial services industry said that they either are not being asked their opinion or, if they are, their suggestions are being shoved aside without consideration. (See story on page C10.)
“The firm pretends to listen,” says an advisor in Ontario with Winnipeg-based Great-West Life Assurance Co. “It’s just lip service. They come in and interview us, but nothing comes of it.”
Firms deliver on what matters
Although the firms still are struggling to meet their advisors’ expectations in these areas, the firms are not lagging when it comes to what advisors value the most.
That’s because advisors have given their firms top performance ratings in the three categories that advisors consider to be the most important to their businesses: “firm’s ethics,” “freedom to make objective product choices for clients” and “firm’s stability.”
It’s not surprising that advisors across the four industry channels value the freedom to do what’s best for their clients and to choose the best available products that are out there. Both Leede Financial Markets Inc. and PPI Solutions Inc. garnered a very impressive rating of 9.9 in the “freedom to make objective product choices” category, with many of their advisors stating this is one of the best aspects of working at their firm. (Both companies are based in Calgary.)
“The flexibility of being able to choose the best products for my clients is one of the most positive aspects of my firm,” says a PPI Solutions advisor in British Columbia.
Adds a Leede advisor in the same province: “The best thing about Leede is the freedom to make choices in terms of investments. You’re not pressured to do anything [by] Leede. It’s about the freedom of your day, in which you can choose your schedule – unlike at the banks, at which they chain you in there.”
Firm’s ethics, freedom to make objective product choices and stability had the highest overall average importance ratings, at 9.6, 9.5 and 9.4, respectively. And with regulation continuing to bog advisors down, a firm’s stability will provide advisors with the reassurance they need in order to know they can handle whatever curveball is thrown their way, such as enhanced technology or additional compliance staff.
Winnipeg-based Investors Group Inc., for one, received a high performance rating for stability, at 9.5.
“The size of the company provides inherent stability,” says an Investors Group advisor in Alberta, “so any change in the regulatory environment will not get us scrambling. We can withstand market changes.”
John Wiltshire, senior vice president, marketing, with Investors Group, stays in contact with his firm’s advisors on a regular basis in order to maintain their sense of stability. By meeting advisors face to face, senior executives and management are able to communicate openly with the advisors about the firm’s strategic focus, including the firm’s successes and the stable environment it aims to provide to its advisors.
“Our entire strength as an organization,” says Wiltshire, “is highly dependent upon a happy, informed [advisory] sales force [that] takes care of [its] clients on an exemplary level. We go out and share our view of where the industry is at and where we need to move as a company.”
Connecting with advisors is how Investment Executive (IE) gathers these ratings; IE researchers Justin da Rosa, Tessi Sanci, Dane Taylor and Jeff Wimbush spoke with 1,802 financial advisors at 44 firms over a six-month period starting in January.
Advisors were asked to provide two ratings for each Report Card category: one for their firm’s performance in that category and another to quantify the importance of that category to their business. The ratings are based on a scale from zero to 10, with zero meaning “poor” or “unimportant” and 10 meaning “excellent” or “critically important.”
Individual ratings then were averaged for each category, for both each firm and for each of the four Report Cards. A firm’s IE rating indicates the average of all the categories for which that firm was rated; the “overall rating by advisors” is the rating out of 10 that advisors gave their firm as a whole, on average.
New to the Report Card series this year was a question asking advisors to rate “your sales assistant.” Not surprising, this category received very high performance and importance ratings. Advisors with brokerages and mutual fund dealers praised their sales assistants for the support they provide to both their teams and their clientele.
Says an advisor in Ontario with Toronto-based Richardson GMP Ltd.: “[Assistants] take a lot of pressure off you if they do their job properly – and mine do.”
Top sales assistants are needed
Toronto-based RBC Dominion Securities Inc. (DS) received one of the highest ratings in the sales assistant category in the Brokerage Report Card, at 9.3. The firm has a recruitment team that helps to find potential candidates for this job – and advisors are directly involved in the hiring process. Once a sales assistant joins a team, DS provides extensive training through branch managers, online platforms such as orientation webcasts, and a mobile classroom team that travels across the country.
“Sales assistants are a very important part of the whole process,” says David Agnew, DS’s CEO and national director. “As you look at the business, the way it’s evolving, [advisors’] practices are much larger than they used to be, so they require real top-notch support and sales assistance within the team.”
Another category that was added to the Report Card series recently (in 2012) and which is garnering positive responses overall is the “firm’s diversity and inclusion strategy.” Advisors continue to commend their firms for going above and beyond their expectations in building a work environment that’s open to people with disabilities, women and people of all types of ethnicity and sexual orientation. Although all firms did well in this category, the banks and credit unions were the highest rated in the series this year.
Toronto-based Bank of Nova Scotia garnered a 9.4 rating in this category in this year’s Report Card on Banks and Credit Unions. The bank not only has a global diversity and inclusion strategy that spans the entire organization, the bank also emphasizes dates that focus on issues that are important to its advisors, such as International Women’s Day, LGBT Pride Month and World Mental Health Day.
“The inclusion strategy is tremendous,” says a Scotiabank advisor in Ontario. “We had 12 languages being spoken at our branch at one point.”
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