With stock markets and assets under management almost back to their pre-recessionary heights, Canada’s brokerage industry appears to be back in business. Companies are looking to add talent, and many advisors are making the switch to a new firm.
The results of this year’s Brokerage Report Card show that a greater number of advisors surveyed have moved to their current firms within the past three years than had been the case in the past few surveys. And most of the firms in the Report Card say they are actively recruiting by drawing advisors to their business cultures and strong brands.
Toronto-based Richardson GMP Ltd. and Raymond James Ltd. — the two firms that had the greatest percentage of advisors in the survey who had joined their brokerages recently — promote their business models and corporate cultures to potential recruits. In fact, Andrew Marsh, CEO of Richardson GMP, says that one of his firm’s key selling points is that many of its advisors — who need $100 million in AUM to sign on — appreciate being equity owners. “For advisors,” he says, “that opportunity to own a piece of the business is pretty rare today.”
Similarly, Raymond James’ business model is a big draw for recruits. Terry Hetherington, the firm’s executive vice president and head of its private client group, says the firm’s model of independence, the suite of products and services it offers and the research it provides are key reasons why advisors join the company.
Yet, Raymond James is very selective in its growth strategy, looking for advisors who are the right fit, Hetherington says: “We turn down a lot of people who want to come here, [if] we don’t think it’s a good fit [for them or for the firm].”
Much like Raymond James, other firms, such as Toronto-based RBC Dominion Securities Inc. , are looking for advisors who are the right fit. The difference in DS’s case is that it is doing so a little more publicly, advertising the high-end advisors who have recently joined the firm in newspapers and on its website.
“A lot of investment advisors have noticed that many very highly respected people have joined DS over the past five years,” says David Agnew, CEO and national director of DS. “It’s amazing how many unsolicited calls we are receiving from [advisors who are with] our competition.”
Although recruiting top talent requires a unique set of skills and a significant amount of effort, providing exceptional and specialized transition support to those advisors who join the firm is a whole other — but important — matter. In fact, Marsh says, if a firm makes recruitment the most important part of its growth strategy, it better “darn well” be good at transitions.
Advisors who have had a positive experience when switching to a new firm often speak of the calibre of their firm’s transition team, which usually includes a group of administrative people who are dedicated to aiding a successful transition. In order to do that, Marsh says, the firm’s transition support staff are prepared to help new advisors transfer their businesses well in advance of their arrival.
“We had an army of well-heeled and organized people for both administrative and ongoing information-technology support,” says an advisor in Alberta with Richardson GMP, noting that the in-depth support during the transition allowed him to focus on serving his clients.
Raymond James, for its part, employs relationship-management associates to help with the transition process, says Hetherington. These RMAs work directly with the new advisor in the branch — and even over the weekends in the initial weeks of the transition.
Says a Raymond James advisor in British Columbia: “[The practice] was moved in three days, including the book. Raymond James got it done expeditiously and paid all of our transfer fees.”
In contrast, advisors who have had a less than a smooth transition feel ignored by their firms and also note that the transition teams — if any were supplied — were inefficient. In fact, some advisors who recently transferred to Toronto-based BMO Nesbitt Burns Inc. felt they needed more staff involved in the process. “I needed more bodies,” says a Nesbitt advisor in Ontario. “I needed support to make calls to clients and to do the paperwork.”
The firm’s transition support is tailored to the individual needs of the advisor, say Nesbitt executives. For example, if the advisor already has a large team, he or she would receive less help from head office; in contrast, a smaller team or an individual advisor would be given more support. The principal focus of the transition for Nesbitt is to inform clients of the switch — and what it means for them.
Staff-related issues were also important to an advisor in Alberta with Toronto-based TD Waterhouse Private Investment Advice. In fact, the advisor says, the transition experience was a “nightmare” because there was no support from an administrative assistant or an in-house team. As a result, the advisor had to hire support staff to help with the transition. IE