Two categories continue to be particularly important for financial advisors surveyed for the 2024 Dealers’ Report Card: “systems for fee-based advisors” and “advisor education & development.” We take a look at how sentiment toward these areas has changed — and stayed the same — between 2023 and 2024.
Systems for fee-based advisors
Technology and training for fee-based advisors remained valued. The importance average of the systems for fee-based advisors category held relatively steady at 8.8, compared with 8.7 last year.
The category’s performance average was 8.1 this year, up from 7.9 in 2023 but lagging overall importance by a margin of 0.7 (compared with a gap of 0.8 in 2023).
Exploring advisor sentiment shows where dealers can improve. One firm, Desjardins Financial Security Investments Inc., saw its performance rating in this category dip significantly (by more than half a point), to 7.4 from 8.1 last year. Advisors with DFS Investments raised technological and operational concerns, with one advisor in Ontario saying the fee-based systems are hard to use because of capacity constraints and administrative burden.
“They say they’ll revise [the systems] and promise change, but never deliver,” said a DFS Investments advisor in Quebec, who also called the system “very uncompetitive” and “badly coded.”
“There are a few functionalities that must be improved … to make sure that we are able to charge the adequate or appropriate fees to our clients,” said André Langlois, the firm’s vice-president of Independent Networks sales and distribution. DFS Investments’ technology stack is set to improve over the next two years, he added, with the objective of giving fee-based advisors more flexibility and better account management tools: “The proportion of accounts [that are] on the fee-based [system] is increasing year after year.”
For most of the other dealers rated in the category in both 2023 and 2024, fee-based systems ratings were either static or slightly improved. Advisors at these firms still offered suggestions and criticisms, however.
One example comes from Manulife Wealth Inc.(rated 6.8, up from 6.4 in 2023 but below the category’s 8.1 performance average for this year). An advisor with that dealer called the systems “weak,” adding that “a fee-based platform should feel more distinct; not necessarily upscale but [the] client should feel that they’re part of something.”
Several other Manulife Wealth advisors cited the dealer’s ongoing technology overhaul, and sentiment was optimistic. President and CEO Richard McIntyre said the firm’s growth in fee-based activity has exceeded his expectation. So, “we’re investing heavily in our fee-based platforms,” he added. “We see where the industry is going in a fairly meaningful way, hence why we brought in [systems] like Envestnet.”
Advisors with CI Assante Wealth Management (rated 7.2 in the category, down from 7.5 in 2023) asked for their firm’s technology to become more streamlined. “The issue is it’s not user-friendly,” said an advisor in Atlantic Canada. “It’s fragmented, [with a] high chance of error.” This advisor and others mentioned that the system sometimes had trouble calculating key figures.
CI Assante and its vendor began planning a year ago to improve processes and systems for fee-based advisors, said Joady Guyot, vice-president, advisor engagement, with CI Assante. Those fixes are forthcoming, and advisors’ hurdles are “still on our radar.” The dealer also is implementing a new technology platform over the next year, she said.
One CI Assante advisor credited the company for designing training materials for advisors interested in the fee-based business model. “They’ve done a good job teaching advisors how to be better,” said an advisor in British Columbia. This type of effort will continue, Guyot said.
Advisor education and development
The performance average for advisor education and development rose to 7.9 this year from 7.7 in 2023. Its importance average remained stable at 8.1.
Two of the 11 firms assessed had significantly improved performance ratings year over year in the category. Manulife Wealth was rated 7.4, up from 6.8, with advisors appreciating a variety of educational access points. Meanwhile, Sterling Mutuals Inc. was rated 7.9, up from 7.3, with advisors valuing learning tools such as conferences and webinars.
One Manulife Wealth advisor in B.C. mentioned a sizable continuing education (CE) database, and other advisors appreciated resources like presentations and webinars. While a couple of advisors suggested greater monetary support for obtaining CE credits would be useful, a Manulife Wealth advisor in Quebec said that only basic help should be expected: “You’re responsible for your part. We can’t be babysat.”
Advisors with other firms agreed.
“If you have chosen to be an advisor, you have to ensure you’re up to speed,” said an advisor in Ontario with Investia Financial Services Inc. “I don’t know how much the firm can help or should be relied on. There needs to be ownership and accountability.”
An advisor with Sterling Mutuals said, “I know that, really, it’s up to the advisor to seek education. I don’t think it’s up to a dealer.”
CI Assante’s rating in the education category dropped significantly compared with 2023, to 7.0 from 7.5. Advisors said the firm offered conferences and courses that were useful, plus helpful automatic reminders if they’re missing credits.
However, a few advisors suggested the firm could be more competitive and innovative, with one CI Assante respondent in Ontario saying, “They have less and less available, and they’re [thematically] years behind in terms of what’s important.”
But that challenge may not be lost on the dealer. Said a CI Assante advisor in Alberta: “They could provide better tools, but they understand this.”
Guyot called the dealer’s educational offering “fairly wide,” referencing breakout sessions at the company’s conferences that are accredited, as well as webinars and various internal training programs.
One challenge, however, is that the accreditation process is getting “harder and harder” to navigate, Guyot said. “I’d love to be able to get CE credits for everything we do, but [at] certain times you just have to make sure that the education is [there], giving people the best information.”
This article appears in the September issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.