Compiling the 2005 Brokerage Report Card

We not only asked advisors to rate their firms’ services and attributes on a scale of one to 10 (with 10 being highest), we also asked them to rate the importance of that service or attribute to them and their practices. The reasoning is that if a firm scores well in an important category, it is more significant than if it scores badly in an unimportant category.

Feedback from the industry led us to make other additions to the report card as well. In January, we conducted a series of breakfast meetings attended by industry managers and advisors and asked them what questions they thought we should be asking.

Their input led us to add several new questions to the survey, and increased the number of survey categories to 38.

One new question is simple but decisive:
“Would you recommend your firm to another advisor?” Other categories new to the survey this year include rating firms on their support for financial planning, support for tax planning and support for insurance planning.

As advisors age, we thought it was time to ask them also to comment on succession planning support and whether their firms offer purchase financing for buying a book of business.

So, how did we conduct the survey? This year IE researchers conducted interviews with 477 brokers at 12 national brokerage firms that have a minimum of 200 licensed reps. We surveyed at least 40 brokers at each of the largest firms, and at least 30 brokers at the smaller firms.

We included Dundee Wealth Management Inc. in this year’s Brokerage Report Card.
The firm has two platforms: Dundee Securities Corp. is a full-service investment dealer that is a member of Investment Dealers Association of Canada, while Dundee Private Investors Inc. is a Mutual Fund Dealers Association of Canada member. The securities dealer has about 500 advisors and a number of advisors on the MFDA platform are migrating to the IDA platform, boosting those numbers.

Don Charter, executive vice president of Dundee Wealth and CEO of Dundee Securities Corp. told IE that having completed the acquisition of Cartier Partners Financial Group Inc. last year, his firm is “seeing tremendous demand in advisors migrating to our IDA platform.”

Our researchers spoke with advisors at both Dundee Wealth arms.

With all these changes in place, our team of researchers began contacting brokers in late January — the height of RRSP season.
Matthew Dales, Nicole Fernandes,
part-timer Caitlin McCarthy and Brigitte Ward conducted the 15-minute telephone interviews, asking brokers to rate their firms while collecting data on broker demographics and business statistics.
Some interviews were completed by fax. All information is confidential and is used for no other purpose but the report cards.

Once the numbers were in, we tabulated the individual broker responses to calculate average scores for each firm in all categories. We then used the category scores to calculate an average score for the firm.

This is also where we made use of the importance ratings. We looked at how many first-place positions a firm achieved among the 19 most important categories. Advisors gave these categories an average importance rating of 8.0 or higher.

We added the first-place bonus marks to the average score to create each firm’s IE rating.
We then used the IE rating to rank the firms and ascertain this year’s winner. We calculated the IE rating to three decimal places to give each firm a separate rank.
You can see the results in the above table.

Once the scores were calculated, we interviewed the national sales managers at each of the firms to get their take on our findings. Their comments added further perspective to our stories. This year two firms declined to be interviewed: CIBC Wood Gundy and First Associates Investments Inc.
IE