Firms step up on products

“It really is an area that never sleeps,” says James McPhedran, senior vice president, customer experience and distribution strategy, with Toronto-based Bank of Nova Scotia. “We have been proactive.”

Income-generating products and portfolios have been particularly hot recently, McPhedran says, as aging clients seek a balance of safety, growth and income.

Scotiabank is benefiting from a corporate reorganization that has brought its three domestic asset-management businesses – Scotia Securities Inc., ScotiaMcLeod Inc. and Cassels Investment Counsel Ltd. – under a single umbrella, Scotia Asset Management LP. The unified structure allows for greater efficiency and economies of scale, and has resulted in a co-ordinated approach in such areas as product development, advisor and client communications, and brand promotion.

In addition, Scotiabank’s mutual fund family is well on its way to becoming, in effect, the bank-branded version of the Dynamic Mutual Fund Ltd. family. Dynamic is a division of DundeeWealth Inc., which was bought out by Scotiabank two years ago. Several of Scotiabank’s mutual funds now have GCIC Ltd. as their lead manager. (GCIC is DundeeWealth’s investment-management arm.) And, based on GCIC’s impressive track record, the changes have been for the better.

Scotiabank advisors surveyed for the Report Card were quite positive about all of these changes. In fact, an advisor in Ontario says the bank’s product offering has seen some “significant changes because we have redesigned our mutual fund portfolio.”

That said, Toronto-based TD Canada Trust, Royal Bank of Canada (RBC) and National Bank of Canada were the firms that received the highest ratings for quality of product offering, at 9.2, 9.1 and 9.0, respectively.

“The [product] offering is very diverse and unique,” says a TD advisor in Ontario. “There are many different solutions for all the different tiers.”

Adds Sandy Cimoroni, president, TD Mutual Funds, with TD: “When we look at any new products, our first decision or focus would be to evaluate what our clients need. Client needs can be evaluated in a couple of ways. We do a tremendous amount of data mining on our client base to determine what their purchasing preferences are or any variances in trends.”

As for RBC, Michael Walker, vice president and head of branch investments, says RBC’s recent launch of corporate-class mutual funds has been well received as clients become more conscious of the positive effects of tax-efficient returns. In addition, he says, there are more products that can be offered in the corporate-class group, as well as products geared toward producing retirement income.

RBC also is launching products that take advantage of the broader asset-management capabilities the bank can attain by leveraging the collective strength of subsidiaries such as London-based institutional money manager Blue Bay Asset Management PLC and Vancouver-based Phillips Hager & North Investment Management Ltd., says Walker: “Through our financial planners, we do offer third-party mutual funds and we have our recommended lists of top third-party providers and funds. There’s been no change in direction, though, which is making sure that our advisors have a shelf that includes not only propriety products but also third-party products that are important to us.”

In bringing new investment products to market, TD (9.1), National Bank (8.8) and Toronto-based Bank of Montreal (BMO; 8.7) received the most praise.

A BMO advisor in Ontario, when asked to comment on the most positive aspect of working at that bank, cited “new products. [We’re] first in innovating mutual funds and retirement-streamed products. And we are reaching out to clients we couldn’t reach before with new products.”

In particular, many BMO advisors take pride in the bank’s efforts in the area of exchange-traded funds (ETFs). Since these products were introduced in 2009, BMO’s family of ETFs has grown to 44 with assets under management of more than $5 billion.

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