Advisors surveyed in Investment Executive’s first Regional Dealers’ Report Card say that although there are downsides to working at a small, regional firm — such as little name recognition, fewer resources and no research department — the upsides are far greater. They include a family atmosphere, less bureaucracy and a feeling of being more than just a cog in a massive wheel.

“I have access to everyone,” says an advisor with Montreal-based MacDougall MacDougall & MacTier Inc. “A small firm means it is easier for me to do my day-to-day business.”

This level of access and lack of corporate red tape often translates into an atmosphere in which advisors are on a first-name basis with presidents, job descriptions are less rigidly outlined and advisors are encouraged to think of themselves as partners, which is helped along at many of firms by offering stock options.

“If I have a problem, I can just give Mark a call,” says an advisor at Calgary-based Portfolio Strategies Corp. , referring to president Mark Kent. That advisor would probably be able to reach Kent easily because Kent forgoes voice mail and answers his phone himself. This kind of accessibility makes the small firms unique in the industry.

“We have an incredibly flat management structure,” says Ross Sherwood, president and CEO of Vancouver-based investment dealer Odlum Brown Ltd. “Everybody’s involved; we treat everybody the same. We don’t have huge amounts of bureaucracy; we’re flexible and a lot nimbler than a lot of the larger places.”

Although this pared-down management structure invites collaboration between management and advisors, in many cases it puts more pressure on the president or CEO. And if the boss fails to perform properly, without the insulating layers of middle management, the whole company suffers.

“I think everything will be a lot better with Ken Parker,” says an advisor with Calgary-based Generation Financial Corp. of the company’s new president.

He is not alone. Many Generation advisors admire Parker, who replaced Denis Elbiniti in May, and say they have high hopes for the firm under his leadership.

This attitude even extends beyond presidents and CEOs. With a small group of people working together, anyone who doesn’t fit the firm’s culture and attitude can be a fly in the ointment. A colleague can “leave a bad taste in your mouth,” as one advisor puts it. And in a small shop, there is often no way to avoid dealing with him or her.

Beyond politics and personality conflicts, another drawback of being small is having less clout than the bigger players. “We’re still small, relative to other firms, which can hinder some things,” says an advisor at Vancouver-based Leede Financial Markets Inc. , “such as expenses being magnified, lack of a research department and having to iron out administrative details.”

One area in which smaller firms have been feeling the pinch is the increasing cost of compliance.

“We’re looking at substantial cost increases from both the regulator and the self-regulator,” says Parker, referring to the Alberta Securities Commission (the regulator) and the Mutual Fund Dealers Association (the SRO). “These out-of-pocket costs are a concern for firms of all sizes.”

Although most believe the way the industry is regulated needs improvement, the general consensus is that compliance and regulation are facts of life in the financial services industry. And until improvements are made, firms have no choice but to meet the standards and get on with their business.

“We deal with it. We don’t see it as an issue. We have our requirements, so we follow the rules and regulations,” says George Aguiar, president and CEO of Toronto-based GP Capital Corp. “I know a lot of smaller firms are challenged to meet regulators’ requirements.”

There are also concerns about scanty marketing and little name recognition. “The flip side of being at a small dealership is always having to explain who you are,” says a GP Capital advisor.

With a handful of branches and no national presence, most smaller firms focus on community-oriented and client-focused events rather than mass-media advertising campaigns. Many sponsor charities, arts festivals or sports events that promote the firm within the community. However, this doesn’t transform the firm into a household name.

“Because of our small size, it’s sometimes difficult to get potential clients to trust us compared with the larger firms,” says a 3Macs advisor. “Our small size is our strength, but it’s also a liability.”

@page_break@But despite these hurdles, advisors at smaller firms have a high level of satisfaction with their jobs. Of those surveyed, 96% would recommend their firm to another advisor — as long as that advisor was right for the job. As well, advisors and management almost unanimously agree that to thrive and be happy at a small firm, advisors not only have to be independent in handling their business, but they must also be team players and fit the firm’s corporate culture.

“We’re looking for entrepreneurial advisors who are dedicated to the business and their clients, and open to letting us help them develop their businesses,” says Kent. “We want people big enough to know their way around without needing their hands held.”

When asked what they valued most about their jobs, many advisors say it is the freedom and independence. Management can grant this freedom because of its in-depth knowledge of every advisor at the firm.

“We have good people and we trust them. That’s probably our best control,” says Tim Price, president and CEO of 3Macs.

“I want professionals who want to work together as a team and move toward a common goal,” adds Merlin Chouinard, president and compliance officer of Saskatoon-based Sentinel Financial Management Corp. IE