Brokerages seek balance amid changes in leadership, strategy

The 10 categories (out of 27) that advisors rated most crucial to their everyday business were almost identical to 2023’s. While the order shifted, nine of the 10 categories appeared both years, and “freedom to make product choices” again topped the list (rated 9.8 out of 10 for average importance, as it was a year ago).

The list of 10 areas in which advisors felt firms performed best also was consistent with 2023’s Report Card, with the product freedom category rated highest once again (9.7, as in 2023). That was followed by “quality of firm’s product shelf” and “support for remote system access & transactions” (each rated 9.2, also unchanged).

Advisors continued using terms such as “freedom,” “autonomy” and “independence” when explaining their needs.

The important things are kept important [by my firm],” said an advisor with Leede Jones Gable Inc. That advisor appreciated independence and the brokerage’s “people-centric, employee-first” attitude. Leede Jones Gable had an IE rating (the average of a firm’s category ratings) of 8.8, up from 8.6 a year ago.

“It’s important to have relationships with the advisors and with the back-office staff, and everybody,” said Steve Johnson, who became president of Leede last year following the death of then president Bob Harrison. “I remember Bob used to say, ‘If you want to know how the firm is doing, just ask. And even if you don’t ask, I’m going to tell you.’” That approach remains, Johnson said.

An advisor with RBC Dominion Securities Inc.in Ontario noted the “tremendous amount of independence” offered by their brokerage, and appreciated RBC DS’s well-known branding. Generally, said an RBC DS advisor in Alberta, “The people working [here] are really good. The managers are fair. I get a lot of resources and support.” (The bank-owned brokerage had an IE rating of 9.0, similar to 8.9 a year ago.)

Performance ratings for most firms in each of the 27 Report Card categories were relatively stable year over year. Five of the 14 firms, however, saw at least eight of their category ratings change significantly (by half a point or more) compared with 2023.

BMO Nesbitt Burns Inc.was the only firm with a significant drop in its IE rating, receiving a 7.8 versus an 8.4 a year ago. Fifteen of the brokerage’s category ratings fell significantly year over year.

Most Nesbitt Burns advisors interviewed for the Report Card cited uncertainty tied to leadership changes over the past year. In February, BMO Private Wealth Canada changed its leadership for the third time in six months, announcing that head Meghan Meger would be replaced by three executives from outside the bank: Craig Meeds, formerly of TD Wealth, now head of wealth advice, Canada; Martha Moen, formerly of Broadridge Financial Solutions Inc., now head of operational excellence and growth; and Maarten Jansen, formerly of RBC Wealth Management, now head of North American products and platforms.

“For most of my career, the investment division was independent, with stability and trust in management,” said a Nesbitt Burns advisor in Ontario. “Now, you have no stability and no trust.”

Another Nesbitt Burns advisor in Ontario said, “It’s not that I don’t like [the new leaders], but they made a big change.” This advisor added that the brokerage’s previous leaders “understood our challenges and what we go through,” whereas that advisor didn’t know the experience level and plans of the new group (as of February, when the interview took place).

“I am sensitive to the amount of change that we have asked our teams to absorb as we enhance our model, and I believe that we have the right leadership team to accelerate the delivery of our strategy,” Meeds said in an emailed statement. He said Nesbitt Burns’ strategy of providing an evolving North American wealth-management model remains intact.

Nesbitt Burns’ largest year-over-year rating drops were in the “leadership team” category (rated 6.6, down from 8.5) and “receptiveness to advisor feedback” (6.6, down from 8.3; see “Communication challenges still hamper advisors and firms”).

Nesbitt Burns advisors nonetheless praised their business autonomy.

“[There’s] the flexibility of choosing my schedule and the way that I work with clients. The freedom is great,” a Nesbitt Burns advisor in Quebec said. Several other advisors complimented the firm’s research capabilities, and an advisor in British Columbia appreciated their direct access to skilled analysts and strategists.

Odlum Brown Ltd. also saw significant rating drops for its “leadership team” and “receptiveness to advisor feedback” categories (rated 7.7 and 6.9, respectively, down from 8.4 and 7.7 in 2023), as well as for eight other categories. Its 2024 IE rating was 7.7, down from 8.1 a year ago.

Kim Abbott, Odlum Brown’s vice-president and director of sales and business development, retired in March after almost 15 years with the firm. Longtime president and CEO Debra Doucette remains at the helm, but some advisors felt uncertain.

One Odlum Brown advisor believed “a major leadership change” was in the works. Others expressed mixed views on the future, with another Odlum Brown advisor saying, “I’m hoping we improve to [become] more modern.”

Following Abbott’s departure, the brokerage is evaluating “not only what we need right now, but what we think we’re going to need five years from now,” Doucette said. With Abbott’s help, Odlum Brown spoke extensively with its advisors about their needs over the past year, Doucette added, and the firm will assess that feedback before hiring any new executives.

Despite advisors’ concerns, many praised the firm’s culture: “Odlum Brown is an iconic firm. People care here and people want to be here,” said one advisor.

Ratings for leadership and receptiveness also saw significant year-over-year decreases at CG Wealth Management. The brokerage received ratings of 8.1 in both areas, down significantly from 9.2 and 9.1, respectively, a year ago. Its IE rating was 8.6, down from 8.9.

Several advisors with the brokerage referred to the unsuccessful $1.1-billion management-led buyout offer for CG Wealth’s parent company, Canaccord Genuity Group Inc., in 2023.

One CG Wealth advisor in B.C. called that situation “messy” and “embarrassing,” while another CG Wealth advisor in that province said the firm’s strategy was “all over the place.”

Still, other CG Wealth advisors praised the firm’s leaders, such as Canaccord Genuity Corp. (Canada) CEO Stuart Raftus. “[The leaders] invest in advisors. They get that side of it,” said a third CG Wealth advisor in B.C. , who valued the firm’s continued “culture and camaraderie.”

CG Wealth did not comment on the takeover bid from a year ago, but Tim Evans, chief operating officer for Canada, shared some of the firm’s priorities. These include “retention, recruitment and asset growth,” he said, and leaders aim to consider the advisor’s perspective when making decisions. For example, the firm plans for its technology platform to accommodate “a wide range of advisor approaches in terms of how they run their business and [their] wide range of clients.”

Trust in leadership paired with innovative firm strategy is essential to advisor satisfaction.

Edward Jones was the only firm of the 14 to see numerous significant rating increases for its firm culture categories. It had a total of 12 categories with notably higher ratings compared with 2023, and its IE rating was 8.7, up from 8.3. Many advisors praised David Gunn, principal and president with Edward Jones Canada.

“I’ve never been bored for a second,” said one Edward Jones advisor in Alberta. “I’ve worked my butt off and been given every opportunity I’ve ever asked for. There’s no ceiling to your career potential.”

Advisors with TD Wealth Private Investment Advice also shared positivity, giving significantly higher year-over-year ratings in six categories. Advisors weren’t shy about suggesting how their firm could further improve its tools, but they also appreciated efforts by leadership in the past year. Said one TD PIA advisor in Ontario: “[There are] dedicated and hardworking people who put clients first. They’re doing way more than the bare minimum.”

See the full Brokerage Report Card ratings chart for 2024.

Read more about our methodology.

This article appears in the June issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.