Advisors surveyed for the 2010 Dealers’ Report Card are sending a clear message: firms’ performance in the “back office and administrative support” category still isn’t as strong as it should be.
Although advisors rate the quality of their firms’ processing software in this category, they also take into account the support staff that perform a host of administrative duties, including copying and transferring client data and information from one widget to the next.
Advisors understand that this process is bound to involve a certain amount of errors. “They’re human, so they make mistakes,” concedes an advisor in Saskatchewan with Mississauga, Ont.-based PFSL Investments Canada Ltd.
However, the overwhelming sentiment is that firms aren’t paying back-office administrative staff well enough to attract and retain educated or trained employees that understand advisors’ businesses.
The result is just about as bad as it can get. Common were statements such as this one from an advisor in Quebec with Ottawa-based Independent Planning Group Inc. who rated his firm at 6.0 in the category: “We’ve sent papers such as know-your-client statements, only they lose them.”
The fact that IPG, with a performance rating of 8.8 in the category, is among the highest rated firms despite its back-office staff still losing some forms integral to the financial planning process speaks to the depth of the challenges across the entire dealer channel.
In fact, this is the sort of message that advisors across the channel have sent to their firms in years prior — and this year’s ratings paint no better a picture. Overall, advi-sors rated the back-office category a middling 7.8, down by only 0.1 of a point from 7.9 last year.
More important is that there remains a wide gap between the importance rating advisors gave to their back office (9.1) and the performance ratings they bestow upon their firms. In fact, that gap rose to 1.3 points from 1.1 points last year.
This reveals that there is growing dissatisfaction among advisors with how firms are performing. And that’s a problem because advisors rate the category fourth overall in importance, behind consistently important categories such as “firm’s ethics” (9.5); “freedom to make objective product choices” (9.4); and “firm’s stability” (9.3).
One firm’s scores stand out like a sore thumb. Advisors with Richmond Hill, Ont.-based Global Maxfin Investments Inc. pounded their firm with a 6.2 performance rating, the lowest in the category.
A Global Maxfin advisor in Alberta who rated the firm at 2.0 in the category says the problems stem from the recent acquisition of his former firm, Portfolio Investment Services (Canada) Inc.: “PIS was a 7.0, but [Global Maxfin] is really, really bureaucratic and slow.”
@page_break@Adds a colleague in the same province: “If they were able to maintain their staff instead of training new people, things would be better.”
That last comment points to a challenge facing the entire channel. And some of these same themes — turnover, education and communication skills — show up every year.
“There seems to be a high staff turnover, so training becomes an issue,” says an advisor in Alberta with Quebec City-based Desjardins Financial Security Investments Inc. “People are not always up to speed because they have not been there long enough.”
An advisor in British Columbia with Burlington, Ont.-based Manu-life Securities echoes that theme, noting that “turnover is high” and that the firm’s back office is replete with trainees.
Even advisors with the highest-rated firm in the category, PFSL, share similar complaints. Says an advisor in Northern Canada: “Sometimes you might get someone on the phone who isn’t trained enough.”
High staff turnover is mostly a function of one thing: poor remuneration. The fallout from poor pay is that the job will attract employees with less skills and training, and that’s something advisors seem to understand. “They’re not paid the big dollars, so there’s high turnover,” says a Manulife advisor on the West Coast.
It’s worth noting, though, that things aren’t all bad when it comes to back-office ratings. Although many of the firms’ ratings mirrored those of last year, advisors with Winnipeg-based Investors Group Inc. rated their firm higher this year, at 8.3 from 8.0. Says an advisor in Ontario: “Usually, when I call them, they get back to me right away.”
And at IPG, an advisor in Ontario points out that the back-office administrative support is “one of the reasons I switched [to this firm]. The last dealer was horrendous.”
IE