Stable management structures, a clear strategic focus and open lines of communication between head office and the branches remain the keys to an advisor’s overall happiness at a firm, according to this year’s Brokerage Report Card.
The good news is that the majority of investment dealers rated highly in these categories, with TD Waterhouse Private Investment Advice and, to a lesser extent, ScotiaMcLeod Inc. , enjoying significant improvements. Two firms, however, continue to struggle: Blackmont Capital Inc. among the independents and CIBC Wood Gundy among the bank-owned dealers.
Blackmont, which was known as First Associates Investments Inc. until last fall, has undergone many changes in its executive ranks in recent years. The latest switch saw Stewart Raftus, who had been in the CEO job since September 2003, leave in March for Halifax-based Seamark Asset Management Ltd. After Raftus’s departure, Gerald Throop was named president of Blackmont; Bruce Kagan became executive vice president and head of wealth management.
As a result, Blackmont advisors are frustrated by the instability at the top, a lack of clear focus and communication, and even the change in company name, which has resulted in a lack of brand recognition.
“It’s seems upper-echelon management is confused, or doesn’t tell the retail side what the plan is,” says a Blackmont advisor in Western Canada.
Many Blackmont advisors in the West complain that the Toronto-based firm doesn’t understand their needs. “There’s an east/west disconnect on style of business, management, mandate and retention. They’re doing a poor job of it,” says another Blackmont advisor from the West.
Other Blackmont advisors were more forgiving. “There have been some growing pains, but we’re headed in the right direction,” says a West Coast advisor.
Blackmont’s Kagan acknowledges the many changes at the firm in recent years have caused some unhappiness among advisors. He says the company tries to keep the lines of communication open between head office and the branches. He also says overall happiness will improve as Blackmont brings aboard new advisors attracted to the company’s business model.
Advisors at Toronto-based Wood Gundy say changes in the management structure have left them feeling confused about where the firm is headed. In April 2005, CIBC brought in Victor Dodig to head its revamped wealth-management division, under which Wood Gundy operates.
“There might be some sort of plan, but there isn’t anyone here who can articulate that vision,” says a Wood Gundy advisor in Ontario. A fellow advisor from the West adds that the strategic focus “seems to change all the time.”
Some advisors are also feeling the effects of CIBC’s recent missteps, including its involvement with Enron Corp. “There has been a lot of negative press — for which I have to answer to my clients — that was generated by a completely different part of the firm,” says an Ontario advisor.
Tom Monahan, head of Wood Gundy, believes the best way to communicate stability and focus is for upper management to “get out there” and meet advisors, a strategy he has pursued. The bank has developed a “connected leadership” program that brings smaller groups together for educational and team-building purposes.
At TD Waterhouse, advisors gave the firm much improved scores in both stability, up to 8.9 from 7.4 in 2005, and strategic focus, up to 7.6 from 7.1 the previous year. The results indicate a growing sense among advisors that the turnstile in the brokerage’s senior-management suite has finally stopped.
“We went through a period in which we had four presidents in four years. It’s nice; now if you want to send something to the president’s office, you don’t have to mark it ‘occupant’,” quips one TD Waterhouse advisor in Ontario.
Executive vice president Bill Hatanaka took over TD Wealth Management Inc. in 2003, and has built a new executive team.
“We’ve been very stable,” says Mike Reilly, president and national sales manager for TD Waterhouse, who was brought in by Hatanaka almost two years ago. “Over the past 18 to 20 months, we’ve probably changed our branch-management team in the neighbourhood of 40%-50%. Now we’re dealing with changes to our branch routines.”
Toronto-based ScotiaMcLeod has also enjoyed a noticeable rise in its stability score, improving to 9.4 from 8.8 in 2005. Hamish Angus, head of Bank of Nova Scotia‘s brokerage arm, took over the reins at ScotiaMcLeod in 2004.
@page_break@”It has come a long way in two years, changing the morale, putting the right people at the top,” says an advisor in Quebec.
ScotiaMcLeod’s strategic focus score dropped to 7.8 from last year’s 8.1, a middling number among the bank-owned brokerages. Some ScotiaMcLeod advisors complain about what they think is the firm’s reactive, as opposed to proactive, nature.
“We wait for the other big bank-owned firms to go first, then follow later after we see which way the wind will blow,” says an advisor in British Columbia.
Toronto-based RBC Dominion Securities Inc. enjoyed the highest stability and strategic focus scores among the bank-owned dealers, with 9.4 and 8.4, respectively. DS’s leadership group, consisting of national director David Agnew, managing director Mike Scott and chief administrative officer Grant Richmond, has been in place for about three years.
“Our current team is as good as it gets in the industry,” says another advisor in B.C.
Among the independents, Edward Jones stood out with a 9.7 score in stability and 9.4 in strategic focus.
Richardson Partners Financial Ltd. nosed out Wellington West Capital Inc. among the boutique firms, with 9.6 in stability and 9.7 in strategic focus. “We know where we’re going, and we know how we’re getting there,” says a Richardson advisor in Manitoba. IE