This article appears in the May 2022 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
Investment in financial planning support is crucial if brokerage firms want to meet clients’ needs and retain financial advisors.
The Investment Executive 2022 Brokerage Report Card found that more advisors were building financial plans for clients compared with a year ago: 93.5% reported doing so, up from 90.8% in 2021.
“Support for developing a financial plan for clients” also improved. The category’s average performance rating, 8.9, rose from 8.4 in 2021, which is considered a significant increase (0.5 points or more).
“We’ve committed to [planning] 100%. It’s part of the future,” said an advisor in Quebec with RBC Dominion Securities Inc. The firm led the financial planning support category at 9.7, up from 9.5 a year ago.
“We really accelerated in 2022 on the planning aspect,” said David Agnew, CEO of RBC Wealth Management Canada. The firm’s strong performance rating was likely due in part to improvements in its planning tool, myGPS, Agnew suggested.
“When we first introduced it, it was very basic,” he said. “But every year, including this year, we are enhancing it to make it more sophisticated for clients.” There are now tools for business owners and clients with holding companies, for example.
Advisors welcomed the investment. “We just have tremendous support,” said an RBC DS advisor in Atlantic Canada, referencing myGPS. “If it’s too complicated, you can bring in another person to help you.”
“I typically do [plans] for people [with] over $1 million, but the software has made it easier to do [plans for] people with less,” said an RBC DS advisor in Ontario.
Advisors with Richardson Wealth — which tied with Wellington-Altus Private Wealth Inc. for the second-highest rating in the planning category, at 9.3 — also lauded their firm’s technology improvements.
“In prior years [technology] was a weakness, but [the firm] has done a lot to improve the software,” said a Richardson Wealth advisor in Ontario. “There’s [the] ability to provide forecasts for clients and illustrations.” Richardson Wealth’s financial planning rating also was 9.3 in 2021.
Some Wellington-Altus advisors observed that the firm was improving its digital planning tools, but said the firm still had work to do. (Wellington-Altus’s rating for financial planning support fell significantly from 9.9 a year ago.) Shaun Hauser, CEO and co-founder of Wellington-Altus Financial Inc., confirmed that the brokerage is working on a technology partnership with a new external vendor.
However, advisors said human capital was an area where Wellington-Altus was getting it right.
“The financial planning team hasn’t sat back and rested; they’re always looking to improve,” said a Wellington-Altus advisor, who added that advisors are involved in testing early software versions.
Hauser further said investments in financial planning are “at the top of our list,” noting a main hurdle has been finding and hiring quality holistic experts. The firm has “open mandates to hire regional senior financial planners wherever our people need them,” he said.
Meanwhile, BMO Nesbitt Burns Inc.’s financial planning category rating rose two full points: to 9.1 from 7.1 in 2021. BMO’s ratings for each of the wills and estate, tax and insurance planning support categories also improved significantly.
“It’s been better since we’ve merged together,” said a Nesbitt advisor in B.C. , referring to the 2019 amalgamation of BMO Private Banking and the brokerage arm. “There’s a lot more support there. It’s easier to get information.”
In an email, the bank-owned brokerage said it’s improving digital tools as well as its specialized wealth advice offering, with advisor feedback and testing being “the driver for much of this work.”
The lowest-rated firm in the financial planning category was Raymond James Ltd. (7.9, down from 8.4 a year ago). Support was “spotty,” said one of the firm’s advisors in Ontario.
Many Raymond James advisors said they have taken the lead on planning within their own teams, as turnover in the financial planning department led to a lack of available experts. The firm acknowledged staffing issues within the past year, but also said in an emailed statement it has hired more planners and added advisor training, consulting, tech support and complex planning tools.
Overall, advisors’ comments made clear that financial planning is becoming more important.
“It’s become one of our top priorities. We’re working toward a lot more [plans] this year,” said an advisor in Ontario with Richardson Wealth.
“I believe financial planning is the backbone of what we do for our clients,” said a Wellington-Altus advisor.