In an industry in which virtually every major Canadian brokerage house is looking to scoop up seasoned advisors from competitors, it is an anomaly to find a firm that says it’s focused on finding rookies yet hanging onto its current staff. Yet that’s the plan at ScotiaMcLeod Inc.

Hamish Angus, managing director at the full-service brokerage arm of parent Bank of Nova Scotia, says keeping his 850-plus advisors happy and productive goes a long way in bringing in new assets, attracting rookies and preventing in-house talent from jumping ship.

“We’re looking at everything from focusing on the branch manager as a coach to trying to make sure the advisor has a better business at the end of the year. And that means more assets — more of the right kind of assets — and making sure the advisor is the primary advisor,” says Angus.

The first step in the plan involved beefing up the firm’s compensation program, which is a standard grid structure topping out at 51%. Late last year, Angus introduced a “performance partnership plan” aimed at advisors earning more than $500,000 in gross commissions. The program can add 4%-6% to an advisor’s compensation if he or she chooses to take the bonus in cash. The advisor can also elect to take the bonus in BNS stock at yearend.

The program wasn’t implemented to quell advisors’ dissatisfaction with the existing payout, but rather an attempt to “get focused” on the way advisors regard their employer, he says. “The plan was to get advisors to think of themselves as partners in the firm and reward them for our successes. With this program in place, they have a direct impact and get a direct reward.”

Tying advisors’ compensation package to the firm’s profitability turned out to be not only a good way to increase advisor satisfaction but also an effective means of tapping into advisor feedback. Since launching the performance partnership plan in 2005, advisors are much more vocal about the goings-on within the company, Angus says: “There is much more interaction with me, and there’s a genuine interest in what is happening at the firm.”

Advisors are also holding their firm more accountable for its spending. ScotiaMcLeod sank a considerable amount of cash into the client-management system and advisor desktop technology in recent months, the results of which won’t be in operation until January 2007.

“Those investments affect the profitability of the firm and the performance partnership plan for our advisors, so we have to balance our expenditures,” Angus says, adding that advisors are “very interested” in how the new technology will help them run their practices.

ScotiaMcLeod currently has almost $60 billion in assets under management, and Angus is eyeing rookies as the next step in bringing in future AUM. He’s aiming to add about 100 rookie advisors by the end of 2006, and about 25 from other brokerages. Most seasoned advisors come from bank-owned firms, he says.

Angus wants to be clear about what he means by a “rookie.” True, new advisors have no previous experience at a brokerage, he says, but the vast majority come from careers in which they have already built relationships with clients. “I call them ‘super-rookies’,” he says. “These are accountants, they are people from the banks. They already have a business — it’s just not with us.”

Regardless of their previous experience, all rookies go through an intensive three-month training program that starts in Toronto before moving into the branch level for a more in-depth orientation. The program is rigorous: trainees learn everything from product information and portfolio management to how to enhance their sales skills through role-playing with actors. “It’s a serious program,” Angus says. “A lot of these people come from existing financial institutions at which they have been selling products without a solid training background.”

Recruits are expected to bring in $5 million in AUM within the first year, a target that Angus says is easily achieved by most.

Although only 17% of the firm’s advisors are women, Angus says, he is eager to recruit more into the business because women have a natural propensity for building client relationships. “Having women on the sales force just makes good business sense,” he says. To prove it, he holds up a book sitting on his desk entitled Women Make the Best Salesmen. He says 35% of the top sales staff are women.

@page_break@He disagrees with the view that advisors from bank-owned firms have a history of griping about the pressures to sell in-house products and the bureaucracy that comes along with working in a corporate environment. “I don’t see it,” he says. “People who come here from other firms instantly feel that we have a different type of culture. And for the people already here, it’s just normal.”

Part of the culture includes an annual two-day retreat noted for being “for advisors, by advisors.” Last May, 250 advisors flew to Whistler, B.C., where they attended information sessions presented by seasoned ScotiaMcLeod reps about how to build their practices. The costs of the trip were paid entirely by the advisors in attendance, a testament to the “unique culture“ of the firm. “This is something that advisors obviously wanted, and they went ahead and paid for it themselves,” says Angus, adding that next year’s event will be held at Mont Tremblant, Que. “This conference shows how different we are as a firm.”

Angus has spent the past 21 years of his career at ScotiaMcLeod. He started out as an advisor before moving on to being a producing branch manager, then regional manager and, finally, head of the brokerage in 2004.

One of the trends he’s beginning to notice is the shift from the Mutual Fund Dealers Association platform to that of the Investment Dealers Association of Canada. Many new advisors arriving at ScotiaMcLeod are coming from the financial planning community, and Angus sees the movement to the brokerage world as a way advisors can offer more services and, consequently, tap into a broader client base.

“I think the shift enables them to build their book of business,” he says. “They’re more likely to have a strong brand and they are really focused on what they like to do, which is the sales side as opposed to running a back office.”

More important, it’s a good way to become the primary advisor. To that end, ScotiaMcLeod launched a portfolio management designation in 2005 for senior advisors who are looking to serve high net-worth clients, a market that’s being eagerly pursued by the 500-plus investment counsel firms already in existence in Canada. Thirty-five advisors have already completed the one-week program, and interest is picking up, Angus says.

“The designation is a way for our advisors to go after new business,” he says. “Canadians are getting older, they’re getting wealthier and they don’t necessarily want to talk to their broker every day about their investment decisions. As our advisors’ books get better, we need to find ways to gain efficiencies in managing them. And this designation is one of them.” IE