Financial planning has become more important for both banks and their financial advisors as they look for ways to fulfil the long-term needs of their clients.
As a result, the Big Six banks are beefing up their support for financial planning. Increasing demand from advisors for better systems to serve clients is forcing the big institutions to invest more resources into the service.
A close look at the data obtained for this year’s Report Card on Banks reveals the necessity of this effort: advisors gave the “support for developing a financial plan” category an overall average importance rating of 9.6, up from 9.2 last year; 98.5% of advisors create financial plans for their clients; and 62.6% of advisors’ clients have a financial plan in place.
In fact, wholesale systemic changes and improvements to existing software tools have taken place at almost every bank in the survey over the past year – and advisors were especially vocal in this year’s survey about receiving this enhanced support for financial planning.
“For the past two years, [financial planning] has been critical,” says an advisor in Atlantic Canada with Toronto-based Bank of Nova Scotia. “Scotiabank wants to be known as the bank for advice.”
Scotiabank, for its part, introduced a customized financial planning system and campaign known as Mapping Tomorrow in October 2014. A press release from the bank states that, since Mapping Tomorrow program’s launch, thousands of clients in Canada have had conversations with their Scotiabank advisors related to the program.
“[Mapping Tomorrow] allows for very customized plans tailored specifically to customers’ needs and customers’ stated cash flow,” says Fulvia Cantarutti, Scotiabank’s district vice president for the Greater Toronto Area North. “That’s a huge investment the bank has made to help the advisors do what they love, which is financial planning.”
Toronto-based Canadian Imperial Bank of Commerce (CIBC) also has been making improvements to its existing financial planning tools. There is a big pilot project underway to test a new retirement planning tool that will allow advisors to be more efficient.
“[The tool] enables our advisors to get information into the system much faster, to change the inputs on the fly,” says Scott Wambolt, CIBC’s senior vice president, national sales and service. “Once you come up with a financial plan for a client, you would be able to sit there with the client and say, ‘Well, let’s just see if interest rates go up or down, what does that do for the output of your financial plan and what does that do for your input in order for you to reach your objective?'”
The pilot project has resulted in a significant increase in the number of financial plans produced by CIBC advisors, Wambolt says. And in this year’s survey, some CIBC advisors praised the bank for its focus on enhancing the tools available to them.
“The firm does a great job and really supports this,” says a CIBC advisor in Alberta. “It’s always doing updates.”
Advisors with Montreal-based National Bank of Canada and Toronto-based TD Canada Trust also noted how improvements to their banks’ financial planning tools have made the process easier and more efficient.
“The software has improved a lot in the past year,” says a National Bank advisor in Quebec. “[The bank] completely remodelled it. They made it a lot more user-friendly, convenient and added new features. It’s not like a system that dates back to the 1990s; it looks like it was made in 2016.”
A TD advisor in Alberta adds that the bank’s new financial planning software has “made a difference. It has made it a lot easier to write up a plan and to put in place. It’s more interactive.”
TD made enhancements to its financial planning software this past September “to enable a better goal-based planning,” says Ana Aujla, manager of corporate communications with TD. “It has all the information for [advisors] to have a great discovery conversation with their clients to understand what their concerns are and what they’re trying to achieve. From there, advisors can input all that information in the financial planning software.”
Although the banks are making great efforts to keep their financial planning software up to date, some advisors have complained that there isn’t enough support or training available to take full advantage of these tools.
“Mapping Tomorrow is great, but the training for it is very poor,” says a Scotiabank advisor in Atlantic Canada. “They drilled [the program] at us with no training. They said just play with it and figure it out. We continue to ask for meetings, but nothing comes out of it.”
Adds a TD advisor on the Prairies: “It’s very hard to get a hold of anybody. We have new software now, but we have had [only] very basic training on it.”
TD, for its part, recognized that changes to its financial planning software would require a tremendous amount of training because they were such a huge change for advisors. So, the firm recently completed a webinar training session, as well as training in the field, Aujla says.
“When we rolled out [the new software],” she explains, “we got feedback very quickly that [advisors] needed more training because the program was so robust and it had so much to offer.”
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