The drive to bring on more high net-worth (HNW) clients is ramping up substantially, and many dealer firms are actively beefing up the products and support services dedicated toward this much sought-after clientele.
This trend was evident in the results of this year’s Dealers’ Report Card. The “products and support for high net-worth clients” category saw the largest year-over-year increase in the overall average performance rating, to 7.9 from 7.1 in 2012.
The reasons for this increase in satisfaction are varied, including: firms lowering management expense ratios on mutual funds and other fees for HNW clients; firms introducing special wrap programs targeted specifically at meeting the needs of HNW clients; and firms having separate programs and staff beyond basic wealth-management services who are dedicated to serving the needs of affluent clients.
Advisors have long been demanding these specialized services. Finally, it appears that firms are listening.
“There has been a big change in the past year,” says an advisor in British Columbia with Winnipeg-based Investors Group Inc. “There are new mutual funds with unbundled management fees, so the advisor’s fee is now negotiable.”
Adds an advisor based in Quebec with Toronto-based Assante Wealth Management (Canada) Ltd.: “The focus on products and support services for HNW clients is getting stronger. It’s an area in which the firm does extremely well.”
Other Assante advisors shared this sentiment, giving their firm the highest rating in the category – 9.2, a marked increase from 7.9 in 2012. This improvement comes on the heels of the firm’s rollout of a new service entitled Assante Toolbox 360. This service, developed in conjunction with one of the firm’s top advisors, provides advisors with workshops, webinars and other support services to help advisors offer a better experience to their HNW clients. Assante Toolbox 360’s services are offered in addition to support services that now are de rigueur, such as access to lawyers, accountants, and tax and estate specialists.
As well, Assante advisors have seen a consistent shift toward better disclosure of the service fees that are included in the costs of mutual funds, says Steve Donald, the firm’s president and CEO: “We’ve continued to enhance the flexibility of our managed-account programs, including full and open fee disclosure, because that is critical.”
Another success story in this category is Markham, Ont.-based Worldsource Financial Management Inc., which saw its performance ratings rise to 8.0 from 6.9 year-over-year. By all indications, Worldsource’s improved rating was spurred by the strength of the established referral network it provides to advisors for their HNW clients.
“There are more than a dozen independent firms we can refer to,” says a Worldsource advisor in Alberta. “And [Worldsource] gives us full freedom to work with them while also providing tons of information.”
Adds Andy Mitchell, the firm’s president and chief operating officer: “We do annual seminars on referrals and HNW business in areas such as estate and succession planning.”
Other firms also appear to be making progress on their HNW offerings. For example, Toronto-based DundeeWealth Inc., Mississauga, Ont.-based Investment Planning Counsel (IPC) and Burlington, Ont.-based Manulife Securities are closing the gap between themselves and the top performers. Even though these firms’ ratings fell below the mean, their advisors appear to be optimistic that these firms are on the right track.
“They’re improving and adding extra services all the time,” says an IPC advisor in Ontario.
Adds a Manulife advisor in Alberta: “We’ve seen new product launches with some HNW wraps that are better than what we’ve had in the past.”
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