When you look at the results of the 1,537 advisor surveys conducted for Investment Executive’s 2006 Advisors’ Report Card, one discernible trend comes to the forefront: overall, advisors from every channel are a happier lot this time around.

Scores in categories from compensation to strategic focus to corporate culture all jumped this year. And even though there is a whole host of reasons for the general upswing in morale — strong markets among them — advisor satisfaction may best be attributed to one simple thing: their firms are finally getting it right.

True, there are some standout firms that are doing a better job than others, thereby buoying overall scores. But the results show that more firms are pulling up their socks, an effort that is not being ignored by advisors.

Take the results of the Brokerage Report Card (IE, May 2006), for instance. Four years ago, morale was so low that the emerging theme was “Brokers see red.” Not so this year. Overall, scores are up for every single firm in the survey, including previous low-scorer TD Waterhouse Private Investment Advice, which pulled itself out of a slump with improved ratings in an impressive 17 categories.

The firm’s turnaround is — at least, in part — because of improved stability in senior management and a clearer corporate agenda, says Mike Reilly, Toronto-based TD Waterhouse’s president and national sales manager. The firm holds quarterly nationwide conference calls for advisors across the country, during which key goals are identified and discussed. It is a simple act, but apparently a vital one in winning advisors’ confidence.

Brokers say that a firm’s stability is one of the most important aspects of how they feel about their jobs. TD scored an 8.9 in that category.

“We have stability in senior management, we understand the strategy and we communicate that,” says Reilly. “Brokers who were doubters two years ago are no longer doubters.”

The higher scores in the Brokerage Report Card are also helped along by Report Card newcomer Richardson Partners Financial Ltd. The Winnipeg-based boutique managed to tie fellow Winnipeg-based firm Wellington West Capital Inc. for first place on that Report Card, with an overall IE rating of 9.7.

So, what are the investment dealers doing right this year? Judging by the scores, their back-office systems have improved. (Nine out of the 12 firms surveyed improved their rating by at least a half a point from the previous year.) As well, advisors at the bank-owned firms are feeling more able to move to other firms if they so choose. That is a trend that is being reflected across the board, as the combined average scores for “freedom to move firms” has climbed steadily from a meagre 5.5 in 2004 to 6.3 in 2005 and then to 7.4 this year.

But despite an almost two-point surge in the category’s scores over the past two years, advisors’ comments paint a different picture. As is the case every year, there is no shortage of complaints about advisors being “tied to the firm” and the “huge barriers” they face in moving their businesses elsewhere.

Although these comments reflect the feelings of the majority of advisors, the higher marks in the “freedom to move” category may be explained by advisors’ growing sense of overall satisfaction. In other words, leaving a firm is still difficult, but fewer advisors want to leave.

“Switching firms has never crossed my mind,” says an account manager at CIBC.

Clearly, the banks are doing something right this year, and not just with their brokerage arms. Account managers at Canada’s six national banks (IE, July 2006) demonstrated their satisfaction with their firms with markedly higher scores in various categories.

And although it would be easy to pin this boost in morale on the bull market, this does not appear to be the reason. IE research shows that account managers’ book sizes have shrunk to an average $38 million in 2006 from $40 million in 2005, their clients are dwindling (to an average of 417 clients this year vs 511 last year) and the average client has about $111,000 in investible assets, down from $154,000 in 2005.

Still, account managers are a happier group. Scores are up by at least a half-point in trade execution, living up to promises and freedom to move to another firm. Account managers also feel their product choice has never been better (see story on page C14). Not surprising, these are the same categories that account managers rate high in importance.

@page_break@If firms were to learn anything about what it takes to satisfy their advisors, it might be this: find out what advisors think is important, then get it right. It’s no coincidence that the highest-rated companies in any channel scored top marks in those categories most valued by their advisors.

Take the results of this year’s Planners’ Report Card (IE, June 2006). Those advi-sors told us the three most important things are ethics, freedom to make objective product choices and the stability of the company. The two firms that performed the best in these categories — Montreal-based Peak Investment Services Inc. among the full-service planning firms and Mississauga, Ont.-based PFSL Investments Canada Ltd. among the mutual fund dealers — also took the No. 1 spot among those operating on their respective platforms.

The same is true of the insurance channel (IE, August 2006), in which Vaughan, Ont.-based World Financial Group Inc. and Aurora, Ont.-based State Farm Insurance Cos. scooped up the top overall scores, including the highest scores in ethics and stability — the two things insurance advisors say they value most.

“The firm’s managers make a promise and then they stand by it,” says a happy State Farm rep in Ontario. “They’re solid, solid, solid.”

Companies that deliver the goods in important aspects such as ethics and freedom will not only be rewarded with happy advisors, but they are also more likely to attract new talent. One of the most telling signs of satisfaction is an advisor’s willingness to recommend his or her company to another advisor. On average, 93% of advisors surveyed say they would happily endorse their companies to a peer. Account managers are the most enthusiastic about the company at which they work — 95% say they would recommend their firm to another advisor — followed by advisors at regional dealers (94%) and insurance agents (93%).

“I would recommend my firm without hesitation. I am happy here. The culture is great. And I’m looked at with envy by friends at the Big Five banks,” says a Vancity Credit Union account manger in British Columbia.

Not that advisors at the banks are any less satisfied. Although there is no denying that some still bemoan the bureaucracy at large financial institutions, advisors who like the banks like them a lot.

“I would definitely recommend my bank, and I do all the time,” says a Royal Bank of Canada account manager in southern Ontario. “The type of position is better than most bank positions, in terms of having autonomy and being lucrative.”

Firms across the board appear to be doing a better job of living up to their promises, resulting in a 0.5 jump in overall scores in that category. But there is still some room for improvement. Advisors collectively gave their firms an average score of 8.2 in this category, yet rated its importance at 9.1. Although the gap is narrowing, it is a sure indication that companies could be doing more to make their advisors feel that they are working hard to deliver the goods.

Some advisors, like a few at Toronto-based investment dealer Blackmont Capital Inc. , are holding out on recommending their firm to other advisors until it follows through on its promises. The firm, formerly known as First Associates Investments Inc., has undergone several changes in the executive ranks in recent years, which has left many brokers uneasy.

“What ends up happening when a company gets acquired is that things look optimistic in the beginning. But, over the years, management is continually changing policy, changing direction and changing fee structures,” says a Blackmont advisor in Central Canada.

Firms that are undergoing some form of transition are the least likely to be referred to another advisor. Consider the case of Generation Financial Corp. , a regional mutual fund dealer based in Calgary. The firm appointed new president Ken Parker in May; although Generation advisors are, for the most part, happy with the newcomer, they are holding off making any recommendations until Parker proves himself.

Says a Generation advisor: “Until they start cleaning up their problems and implementing the things they’ve promised, it’s difficult to recommend them.” IE