There has always been a sizable disparity between how investment advisors with bank-owned firms and their counterparts with the regional and national independent dealers perceive their firm’s corporate culture. However, that difference is becoming, on average, even more acute.
Notably, advisors with most of the bank-owned dealers said they’re losing their brokerage culture as their firms get sucked into the parent banks’ monolithic structures, according to the advisors surveyed for this year’s Brokerage Report Card.
That sentiment is evident in the ratings for the “firm’s corporate culture” category. Advisors at bank-owned firms rated their firms, on average, at 7.3 – significantly lower than the 8.7 average rating that advisors at the national and regional independent firms gave. In fact, that average rating for the bank-owned firms would be even lower if not for the advisors at Toronto-based RBC Dominion Securities Inc. (DS), who rated their firm’s corporate culture at a lofty 8.7.
Dissatisfaction reigns
Advisors with BMO Nesbitt Burns Inc. and ScotiaMcLeod Inc., both based in Toronto, were the most dissatisfied with their firm’s corporate culture; not only did they rate their firms significantly lower than last year, but Nesbitt and ScotiaMcLeod received the two lowest ratings in the category, at 5.4 and 6.3, respectively.
Nesbitt advisors pointed to their firm becoming more and more a part of its parent, Bank of Montreal (BMO), as a major reason for their dissatisfaction. They believe this is partly because the dealer’s leadership team is made up of lifelong bankers who don’t see Nesbitt as a separate entity from BMO.
“We are just homogenous with the bank now and we’re losing the distinct culture on the investment side of business,” says a Nesbitt advisor in Atlantic Canada.
“[Nesbitt management] has gone to more of a bank management style, as opposed to investment dealer style,” adds a colleague in Ontario. “We’re run by the bank now, not by brokers.”
Charyl Galpin, head, executive vice president and managing director with Nesbitt, acknowledges that bank-owned firms can be harder to navigate than the independents due to sheer size and competing priorities. However, she adds, Nesbitt’s strategy is client-driven, not bank-driven: “Our culture has always been centred on delivering a consistent and excellent client experience.”
Meanwhile, many ScotiaMcLeod advisors cited the layoffs that took place last spring (after the completion of the research for last year’s Report Card) as the reason for their increasing dissatisfaction with their dealer and its parent bank. Specifically, Bank of Nova Scotia let go 7% of the brokerage arm’s roster of 750 advisors – as well as their assistants.
“They fired people in a ruthless manner,” says a ScotiaMcLeod advisor in Alberta. “They focused on profitability instead of caring about employees.”
“It used to be great, but it’s changed radically since they made these changes last year,” adds a colleague in Ontario. “There’s been a real drop off in morale.”
The layoffs were difficult for ScotiaMcLeod advisors because of the strong culture, camaraderie and tight relationships with their colleagues, acknowledges Rob Djurfeldt, managing director and head of ScotiaMcLeod: “It was a difficult change to go through because it impacted people. We didn’t take those decisions lightly.”
In contrast, DS advisors were very pleased with their firm’s corporate culture. They lauded the parent, Royal Bank of Canada (RBC), for allowing the dealer to maintain its entrepreneurial culture and for having former brokers in management – all while being able to leverage the strength of the bank’s name and robust support services.
“We still have a unique culture within RBC,” says a DS advisor in Atlantic Canada. “When I speak with advisors at other bank-owned firms, it’s not the same – they become what we call ‘bankified.’ We have maintained our culture and management.”
Much praise for the independents
Similarly, advisors with the independent brokerages heaped plenty of praise on their firms’ corporate cultures – albeit for quite different reasons. These range from a collaborative, team-centric approach to partnership structures in which advisors are vested owners in the business.
For these reasons, advisors with Mississauga, Ont.-based Edward Jones gave their firm the highest rating (9.5) in the corporate culture category. In fact, many Edward Jones advisors pointed to the corporate culture as both one of the reasons they joined the firm and one of the most positive aspects about working at the firm.
In addition, Ann Felske-Jackman, a principal and regional leader at the firm, says one of the biggest differentiators at Edward Jones is the limited partnership structure: “We generally find that owners behave differently from employees. [The former] take a great deal of pride in not just the culture, but in supporting each other.”
Similarly, advisors with Vancouver-based Odlum Brown Ltd. rated their firm’s corporate culture at 9.3 because the firm is a tight-knit operation in which everyone works together to serve clients better. As well, a significant proportion of the firm’s advisors have an ownership stake in the dealer.
“That’s why I’m here. There’s a feeling that we’re all in it together as one big family,” says an Odlum Brown advisor in British Columbia. “More than half of the employees are shareholders.”
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