Equity ownership is one of the rewards for advisors who work at brokerage firms. And they value it most when it enhances the corporate culture and builds a team atmosphere.

“I love the culture here,” says an Edward Jones advisor in British Columbia. “To come to work and not feel comfortable is unnecessary extra stress. It’s nice that we all support each other because we all benefit the better the firm does, as we’re limited partners.”

James Werry, CEO of Toronto-based GMP Private Client LP shares the sentiment. “We believe that ownership is key to a great culture,” he says, “and we work hard to attract the best people in the business. Few, if any, firms offer the ownership opportunities we do.”

Adds a GMP advisor in Ontario: “We’re owners; we’re partners; we influence decisions. Managers listen to us; we’re shaping the company.”

In the 2009 Brokerage Report Card, 86% of advisors surveyed report they own equity in the firms they work for. Advisors expressed a variety of reasons as to why they participated — or did not participate, as is the case with the remaining 14% — in their firms’ equity-ownership programs. On the plus side is active ownership and strong corporate culture; holding non-participants back are poor market conditions and concerns about areas in which their firms could improve.

Certainly, the picture isn’t as rosy this year as it was in prior years when it comes to equity ownership. Given the current poor market conditions — in which financial services stocks have been battered — owning shares in their employer is an investment many advisors don’t want.

“All equities have gone down in value,” says an advisor with Canaccord Capital Inc. in Ontario. “There was a [stock ownership] plan, but I watched the market and didn’t buy any.”

Adds a BMO Nesbitt Burns Inc. advisor in Ontario: “Now that Bank of Montreal shares are less than $30, it might be a good time to buy. But it’s a farce right now.”

That said, other advisors see current share prices as the perfect opportunity to reap the rewards of the market downtown.

“I only have options at the moment and I’m waiting for the market to bottom,” says a Wellington West Capital Inc. advisor in Ontario.

A colleague in Quebec says, “Not yet” when asked if he owns equity in Wellington West, adding: “I’m waiting for the bottom.”

Some advisors cite other reasons for their dissatisfaction with owning equity in their firms. One hot-button topic was the way each firm structures its ownership model.

Vancouver-based Odlum Brown Ltd. , for example, allots equity to advisors, but retracts shares once the advisor reaches a certain age. Odlum Brown president and CEO Debra Hewson says this is a fluid way to transfer ownership from older advisors to younger ones, guaranteeing that everyone in the firm is a shareholder at one point.

“We have a mandatory divestiture in our shareholders’ agreement. And when everyone becomes a shareholder, they have to sign it,” she says. “The mandatory divestiture starts at age 60 and decreases 10% a year until the advi-sor is out at age 70. We’ve had lots of discussions as to what the right age should be, and that’s the age to which we’ve all agreed.”

Although advisors divesting their shares sell them at the prevailing price, several advisors say they valued having a stake in the firm and were saddened when they were forced to give it up.

“I owned common shares in Odlum Brown, but I’m too old and had to give them up,” says one advisor. “It’s really a shame.”

A colleague adds that employee ownership should be based on what the advisor brings to the firm, not on his or her age: “I’m 65 and can’t get any more shares, no matter how much I produce — and I think that’s wrong. What should matter is how much you’re producing, whether you’re 50 years old or 90 years old.”

Advisors at bank-owned brokerages expressed resentment toward their firms’ equity-ownership programs, saying higher wages and cash would be more favourable — a sure sign of the times.

“The bonus structure is a method of holding back,” says an advisor with TD Waterhouse Private Investment Advice in the West. “I’m tied to phantom shares that I can buy out in three years. I could have gotten that money earlier through bonuses.”

@page_break@An advisor with Nesbitt in On-tario shares that view. “Not only is the compensation low,” he says, “but the way it’s delivered is a problem. We get share units, and I’d prefer cash.” IE