Big shifts in four firms’ ratings

Read: Insurance Advisors’ Report Card 2017 main chart

On the other hand, many ratings for Kitchener, Ont.-based Financial Horizons Inc., London, Ont.-based Freedom 55 Financial and Woodbridge, Ont.-based Hub Financial Inc. declined by half a point or more – as did their IE ratings.

Freedom 55 was the hardest hit of these three firms. It received significantly lower ratings (half a point or more) in 18 of the 32 categories in which it was rated. Some of the largest drops that Freedom 55 experienced this year were in categories related to wealth-management support, such as “support for developing a financial plan for clients” and “support for tax planning.”

Freedom 55 has more than 100 in-house specialists, including wealth and tax planning consultants, ready to help advisors develop solutions for their clients via telephone or face to face, says Abbie MacMillan, vice president with Freedom 55.

“There’s an entire team of people who have that technical expertise who can wrap their arms around the advisor to help him or her understand how to position products in the marketplace [or] how to have that next layer of consulting around taxes,” she says.

However, the results of this year’s Report Card suggest there may be a disconnection between the firm and its advisors about the level of support available.

More specifically, Freedom 55 advisors gave their firm’s tax planning support a rating 5.9, down significantly from 7.3 in 2016, and also rated their firm’s support for developing a financial plan for clients at 6.3, down from 7.9 last year. For the most part, Freedom 55 advisors complained that their firm’s services and experts are stretched too thin and not always available.

“There is one tax planning specialist serving 150 advisors in my province,” says a Freedom 55 advisor in Atlantic Canada. “He tends to focus on top producers and has no time for anyone else.”

“There’s no one in-house who can help me figure out projections for clients and provide feedback in person,” adds a colleague in Alberta about the firm’s financial planning support.

Another firm that saw its ratings decline in several categories this year was Financial Horizons. In fact, its advisors gave the managing general agency (MGA) significant lower ratings of half a point or more in 16 of the 25 categories for which it received a rating.

The drop in Financial Horizons’ ratings may be, in part, a sign of some of the unease advisors were experiencing when IE was conducting the Report Card surveys in May. Winnipeg-based Great-West Lifeco Inc. had just announced that it had entered into an agreement to acquire Financial Horizons.

Case in point: Financial Horizons’ advisors gave their MGA a rating of 8.1 in the “firm’s/MGA’s strategic focus” category, down from 9.0 in 2016 in large part because of the uncertainty surrounding the deal.

“[The MGA is] in transition, so [strategic focus] is hard to gauge,” says a Financial Horizons advisor in Ontario. “There’s going to be massive changes to the way we do business.”

However, John Hamilton, president and CEO of Financial Horizons, is adamant that everything will remain as “business as usual” for the MGA and its advisors. In fact, since the sale was announced on May 19, Hamilton has spoken with Financial Horizon’s advisors via conference calls and meetings to put any feelings to the contrary to rest. Hamilton also met with the MGA’s advisory council to address any lingering concerns.

“Certainly, [advisors] had questions,” says Hamilton, “and they’re very satisfied and relieved with the answers.”

Financial Horizons advisors also raised concerns about their MGA’s efforts in several other categories, including “MGA’s help in positioning a product” and “support for dealing with changes in the regulatory environment.” The category that had the largest year-over-year decline, though, was the “firm’s/MGA’s marketing support for advisor’s practice.”

Specifically, Financial Horizons advisors gave their firm a rating of 5.9 in the category this year, down a full two points from 2016. Most advisors surveyed said that the resources available to them are limited and generic.

“Typically, you’re on your own,” says a Financial Horizons advisor in Alberta. “[The firm provides] materials that are broader and not advisor-specific – those aren’t helpful.”

Financial Horizons offers individualized marketing support through its rewards program to top-performing advisors. More generally, though, the firm offers advisors help with marketing materials, product information and lead-generation strategies through various web-based platforms.

Hub also saw many of its ratings decline significantly in 2017 – although to a lesser extent than Financial Horizons and Freedom 55. Specifically, Hub’s ratings declined by half a point or more in eight categories, including “your branch manager/MGA’s sales director or regional sales manager,” “ongoing training,” and “back office and administrative support for in-force policy owner services.”

In particular, Hub advisors rated the MGA’s back-office support for in-force policy owner services at 7.7, down from 8.3 in 2016, with some advisors voicing concerns about personnel.

“I just find that they don’t know the different forms,” says a Hub advisor in Ontario. “There are only two people who assist us in this area: one of them is new and the other is part-time.”

In contrast, Sun Life bucked the negative trend this year. The firm received higher ratings of half a point or more in 11 of the 34 categories in which it was rated. Many of these improved ratings are a return to form for Sun Life, as its ratings dropped by this same margin in 12 categories last year.

Sun Life advisors were particularly impressed with how well their dedicated sales agency keeps them informed about the company and the investment industry at large. In fact, Sun Life advisors gave their firm a rating of 8.6 in the “firm’s effectiveness in keeping advisors informed” category this year, up from 7.8 in 2016.

Says a Sun Life advisor on the Prairies: “From products [and] compliance to the markets, the company is very good at getting information to its advisors.”

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