At first glance, the results of this year’s Dealers’ Report Card suggest that most financial advisors don’t care too much about their dealers’ rewards and recognitions programs. However, a closer look reveals that many advisors would pay more attention to such programs if the rewards thresholds were more achievable.
There’s no denying that the “firm’s reward/recognition program” matters little to advisors, as they gave the category the lowest overall average importance rating (5.2) in this year’s Report Card. In part, though, that may be because firms just aren’t doing a good job in this category: the overall average performance rating of 7.0 also was among the lowest given in the Report Card. In fact, the dealers that received top marks in this category did so because advisors praised broadly accessible, well-communicated programs that reward more than just a few top producers.
Still, for many advisors, rewards and recognition programs may never be a priority. For these advisors, serving clients, and the compensation advisors receive for doing so, are motivation enough. For example, an advisor in British Columbia with Windsor, Ont.-based Sterling Mutuals Inc., which does not have a rewards and recognition program, says: “They pay me well, so I don’t need these [programs].”
And an advisor in the same province with Montreal-based Peak Financial Group, which does have such a program in place, says, “I don’t need a gold star.”
For Farhan Hamidani, chief operating officer and managing director with Toronto-based HollisWealth Inc., this attitude carries much weight. “We run a company for independent-minded advisors,” he says. “If I’m an advisor in a small community in Canada making $800,000 or $900,000 a year, there’s nothing more that a dealer can provide with a reward to motivate me beyond my own growth.”
Only top producers are rewarded
That said, there’s a large segment of advisors who might care more about their firms’ rewards and recognition programs if they were structured differently. Among these advisors, the largest contingent said they felt that the rewards were accessible to only a small group of top producers.
“It’s the same big producers who always get the rewards – the ones with nine assistants,” says an advisor in Ontario with Mississauga, Ont.-based Investment Planning Counsel Inc. “Of course they have the highest production; they have the highest expenses.”
Adds a HollisWealth advisor in B.C.: “The rewards program is practically non-existent because the thresholds aren’t realistic for most advisors. [The firm is] trying to attract the $250,000-plus advisors, so the rewards are bait for the big fish.”
No surprise, then, that Winnipeg-based Investors Group Inc. and Toronto-based Assante Wealth Management (Canada) Ltd. received significantly higher performance ratings (8.2 and 7.8, respectively) than their peers in the category for making rewards and recognition programs more accessible to advisors at all levels of production and experience.
“Investors Group is just known to take good care of everyone,” says an Investors Group advisor in Alberta. “They do a good job getting at least 50% of the advisor sales force recognized. It might not be anything big, but it’s an acknowledgment.”
Investors Group rewards its advisors based on their performance within their own cohort – among first-year advisors, second-year advisors and so on – says Todd Asman, senior vice president of products and financial planning with Investors Group: “Obviously, somebody who’s been in the business for three or four years is not going to be able to compete with somebody who has built a practice over 25 years.”
Assante not only had the second-highest rating in the category; the firm improved the most of any firm in the survey, to 7.8 from 7.3 in 2014. A big reason for the improvement could be the way Assante now approaches rewards and recognition, says the firm’s president, Steve Donald: “We have changed the structure of our program so that it is no longer a fixed number of advisors who qualify for a certain reward. Instead, we now have fixed levels – and all advisors who meet those levels qualify for the reward. So, they’re no longer competing against each other, but against themselves.”
Says an Assante advisor in B.C. about the program: “They do a good job of recognizing people who worked hard and achieved exceptional performance.”
Providing more services
In addition to recognizing advisors at all levels of production, Investors Group and Assante are using their rewards and recognition programs to encourage advisors to provide more services to clients.
Specifically, Asman says, Investors Group has had many contests over the past 18 months to encourage advisors to expand their financial planning expertise.
As for Assante, Donald adds, it has used its rewards programs to encourage advisors to offer managed money to clients or obtain insurance designations in order to offer clients a complete package of wealth-management services.
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