Advisors at Canada’s retail brokerage firms are picking up the pieces and are in the process of rebuilding their businesses after the damage caused by two years of stormy securities markets. With compensation levels improving and book sizes on the rise, things are definitely taking a turn for the better, say financial advisors surveyed for Investment Executive’s 2010 Brokerage Report Card.
“We all worked together to see what we could do to keep our chins up during the difficult times,” says an advisor in British Columbia with Vancouver-based Odlum Brown Ltd. “We came through the crisis in fine shape, and that is a testimony to how rock-solid we are.”
Of the 627 advisors at 15 investment dealers surveyed this year, all have two things in common: they survived intact; and although some firms pulled through better than others, everyone is relieved to get back on track.
“Nesbitt didn’t lose as many assets as other firms,” says an advisor in Ontario with Toronto-based BMO Nesbitt Burns Inc. “The firm spent a lot of time and resources teaching us how to retain clients and even win new business during the market downturn.”
Regardless of the state of the markets, advisors continue to place top value on the same three aspects of their businesses: “freedom to make objective product choices,” “firm’s ethics” and “firm’s stability.” One firm that managed to stay consistent over the year in all three categories is Nesbitt, with many advisors praising the freedom they have within the bank-owned environment.
Says a Nesbitt advisor in Alberta: “The most positive aspect of my firm is the freedom and the independence to make investment decisions, to manage clients assets and to run my business the way I want to, combined with strong support from all departments and the stability of a major bank.”
Another of the firm’s attributes is management’s ability to stay in touch with its 1,400 advisors as best as possible, says Richard Mills, Nesbitt’s executive vice president, managing director and national sales manager of Nesbitt’s private client division.
“I think the access for the advisors is extremely high,” says Mills. “I don’t think they are too shy to talk to us. We try to be out in the branches as much as we possibly can as well as encourage a dialogue with them. My role is to explain what we do and why we are doing it. Now, that doesn’t mean every advisor will always agree with what we do; but I think we always owe them an explanation.”
Other firms that are also seeing the fruits of their labour are Winnipeg-based boutique Wellington West Capital Inc. and Vancouver-based national independent Canaccord Financial Ltd. Last year, Wellington West advisors complained of a lack of strategic focus and public image, while those at Canaccord spoke repeatedly about a tarnished image resulting from the asset-backed commercial paper crisis. But both firms have worked hard to make things right over the past year, and their advisors have subsequently rated their firms higher in several categories.
“Despite growing pains, I can see the changes coming down the pipeline,” says a Canaccord advisor in Alberta. “The fact that people are still coming here and moving their books over to the firm tells me that we are still a great firm to be a part of.”
In addition, advisors at Odlum Brown and Toronto-based RBC Dominion Securities Inc. also rated their firms significantly higher in several categories in this years Report Card, which suggests that these firms had kept their ears to the ground when it came to their advisors’ needs.
Along with Canaccord, both DS and Odlum Brown saw their stability and “firm’s strategic focus” ratings improve. As well, advisors at all three of these firms rated their brokerages higher in the “support for tax planning” and “support for insurance planning” categories.
Says a DS advisor in Ontario: “We didn’t have to deal with, for example, what happened in the U.S. We have a good organization that makes good decisions over bad ones.”
“Odlum Brown has really come out of its shell,” adds an Odlum Brown advisor in B.C. “We have a good story to tell and we are finally tooting our own horn. “
Another firm with a good story this year is Macquarie Private Wealth Inc. Australian financial services giant Macquarie Group acquired Blackmont Capital Inc.’s wealth-management arm last autumn from Toronto-based CI Financial Corp. Like most firms that have undergone an ownership change, Macquarie saw a dip in some support service ratings.