Ethics, freedom, stability top account managers’ lists: Includes main chart

Individual firms’ ratings were up across the board. And even though the financial institutions in the Report Card vary, what is important to the advisors doesn’t differ: the good, old-fashioned values of ethical behaviour, objectivity and stability. These are the qualities the 255 advisors surveyed at the Big Six national banks and the three largest credit unions say leaves them free to focus on their businesses and put their clients first.

And the firms that had the highest IE ratings were those that delivered what was most important to account managers.

Topping the list of non-negotiable items is ethics — a broad term to describe, among other things, how well a company does in putting its clients’ interests first. With an importance rating of 9.4 — the highest mark for importance on this year’s survey — advisors made it clear they want a firm that will take the high road in its business dealings. And the firms measured up pretty well. Advisors gave the nine firms an average score of 9.2.

Ethics is obviously what Toronto-based Royal Bank of Canada does best, its advisors say, ranking it a 9.7. “We try to remain product-neutral, and that’s a big change we made last year with investment and credit,” says Michael Walker, vice president of wealth-management services. “We want to make sure we’re doing the right thing for the client.”

Royal Bank expects its 1,500 account managers to know exactly what is best for their clients. “We’re looking for financial planners who are good at client discovery, asking questions, understanding clients’ needs,” Walker adds.

The bank also requires its account managers to hold a financial planning designation and have an average book size of $45 million-$50 million, split 70%/30% or 60%/40% between investments and credit, he says.

When Royal Bank finds advisors who meet these expectations, it makes sure they have all the necessary tools to succeed. “We have 10 to 15 individuals across the country who help financial planners develop and deliver financial plans,” Walker says. “And we have a centralized team of chartered accountants, lawyers and high-end financial planners who provide support and content to advisors around strategies that they can then deliver to their clients.”

Over at the credit unions, account managers at Vancouver-based Vancity Credit Union gave their firm top marks for ethics with a 9.5 rating. The firm also came out on top of the other credit unions with an overall IE rating of 8.7.

Vancity’s values are an integral part of its strategic planning, and strong ethics are necessary to ensure its survival, says Lydia Johnson, vice president of sales and services in Vancouver: “We don’t have shareholders to answer to. Our shareholders are our stakeholders … our staff and our members. We have to make a difference so that people won’t move to a bank for their basic services.”

Vancity’s 160 account managers are encouraged to obtain a certified financial planner designation, build relationships with their clients and meet annual sales targets.

The freedom to make objective product choices and stability, both with a rating of 9.3, followed closely behind ethics when it comes to the most important qualities a firm should possess. And even though Montreal-based National Bank of Canada ended up in the lower half of the rankings this year, it had top marks in the objective product choice category, with a score of 9.2.

“We definitely have goals we have to meet,” says a National Bank advisor in Ontario. “But do they make us sell certain products? No.”

National Bank account managers are not alone in their commitment to product objectivity. Many firms are equipping their advisors with the independence to do what is right for each individual client, including the highly ranked firms in this year’s Report Card. Toronto-based Bank of Nova Scotia offers no specific incentives, while Royal Bank has stated it is “product-neutral.”

Among the credit unions, Vancity took top marks for advisors’ freedom to choose the right products for their clients. Its 9.0 rating is a reflection of the wide array of products available, which doesn’t include any proprietary products.

@page_break@Although there are no incentives to sell specific products, Johnson says, there are rewards — ranging from movie passes to dinner cruises — for sales made during fund campaigns or day blitzes. But this doesn’t seem to sway the advisors when it comes to placing clients in specific products.

“We have a wide range of avenues to offer clients products and services,” says a Vancity advisor. “We’re very objective.”

Rounding out advisors’ top three important characteristics is the stability of the firm itself, also with an importance rating of 9.3. Advisors say they want to have the assurance that their firm is financially sound and that their jobs won’t disappear.

In this regard, Scotiabank clearly has the faith of its advisors. The firm came out on top in this year’s Report Card and was rated above all others for its stability with a 9.5 rating. Even though the rating can be partly attributed to the institution’s 174 years as a major player in Canada’s financial services industry, it is also a reflection of the firm’s high employee retention rate.

“Our retention is very high, and it is because of the great experience people have when they work here,” says the bank’s executive vice president, Wendy Hannam. “We make sure staff have a great place in which to work, that they’re happy and engaged.”

Scotiabank employs 1,100 personal financial planner-designated advisors and 5,000 Mutual Fund Dealers Association-licensed mutual fund representatives.

Hannam says the bank’s emphasis on open lines of communication allows these advisors to connect with the firm. Each year, employees take part in a satisfaction survey to let the bank know how well the firm is doing. Employees also have the opportunity to sit down with their bosses every week and talk about areas they wish to develop or pursue, and “Team Voice” is a feedback forum that gives the firm’s account managers an opportunity to express their opinions directly to an executive.

“It is certainly used for positive feedback, as well. It’s an opportunity to connect. And feedback is immediately responded to by the executive, and that is how we make a lot of changes,” Hannam says. “The Team Voice program is now six years strong and its use continues to increase.”

This ongoing dialogue with executives has made a good impression on account managers.

“We have very focused senior executives with strategic leadership,” says a Scotiabank advisor in Ontario. “Stability makes coming to work a lot easier.”

Making it three for three, Vancity also walked away with top marks of 9.4 in stability among the credit unions. Johnson says the firm’s strategy has six pillars, one of which is the development of its new members.

Vancity, which is now in its 60th year, does this by continually giving back 33% of its annual profit to the communities in which its members live, says Johnson. “If we only make money, we have missed the boat,” she says. “We give back — in some way, shape or form — to the community and to the environment.”

Although Toronto-based TD Canada Trust’s scores in ethics, stability and freedom to make objective product choices were not outstanding, the bank had the highest rankings among the banks in seven of the 25 survey categories, helping it to secure its second-place finish overall in the survey.

“The bank’s managers give you room to improve; they give you room to grow; they give you room to move up within the company,” says a TD account manager in Ontario. “There are many people who can help you attain your goals.”

Adds another TD advisor in Ontario: “Management really knows what it’s doing, and it’s good at communicating that to the employees.”

Although it is clear that some financial institutions have succeeded in doing the right thing to win the support of their advisors, even those firms that did not receive top marks in this year’s survey walked away with improved ratings from last year. These higher ratings show that account manager morale is soaring across the board. Even a firm at the bottom of the spectrum, Report Card rookie Meridian Credit Union, which is based in St. Catharines, Ont., walked away with a respectable 7.1 rating.

And this company knows exactly what it needs to do to improve. John Wink, Meridian’s senior manager of investment services and insurance, says the credit union is focusing on getting all its advisors on the same page after the April 2005 merger of Niagara Credit Union and HEPCOE Credit Union that created Meridian.

Currently, the credit union is in the process of consolidating the two different technology platforms of its former firms and integrating their different banking services so that the banking experience is exactly the same at all branches. “Whether clients walk into a branch in Port Colbourne, Ont., or Port Elgin, Ont., they will have the same experience,” says Wink.

The firm is also expanding the opportunities that are available to its advisors, particularly in the area of wealth management.

“We are making sure that there is sufficient coverage in areas such as financial planning,” Wink says. “Any perceived gaps will be filled going forward. And we are looking at establishing additional employment opportunities.

“We are concerned about our employees,” he adds. “We want to ensure that we are the employer of choice.” IE