More advisors integrate financial planning into their practices: Includes chart

These findings reflect a broader consumer trend, says Ann Bowman, vice president of communications and corporate relations at the Toronto-based Financial Planners Standards Council, the institution that sets the standards for and awards the certified financial planner designation. “Everybody is talking about financial planning,” she says. “Investors are walking into their advisors’ offices with more, if superficial, knowledge of their needs.”

But despite the increased focus on financial planning, the number of advisors at investment dealers with financial planning designations has not risen in concert. This year, 20% of advisors surveyed had a CFP designation, unchanged from last year, while the percentage of advisors with portfolio management designations has decreased slightly. Last year, 20% of advisors surveyed had the Canadian investment manager designation, vs 18% this year. In fact, both figures have decreased sharply from five years ago, when 32% of investment advisors surveyed held the CFP designation and 24% held the CIM.

There are reasons for this, of course. Although licences are mandatory, designations rarely are; firms encourage designations but don’t demand them.

“Clients look at accreditation as a sign that their advisor has a good grounded knowledge in the investment industry,” says Hamish Angus, head of Toronto-based ScotiaMcLeod Inc. “But in the regulatory world in which we live, there’s a lot of compulsory work to do just to keep up with the regulations and maintain continuing education credits.”

Toronto-based Raymond James Ltd. is one firm that encourages its advisors to get their insurance licences and designations. “They’re an important part of the holistic approach to serving clients and their families,” says Peter Kahnert, senior vice president of corporate communications and marketing.

But the firm refuses to mandate it. Adds Terry Hetherington, national sales manager of Raymond James’s independent employee channel: “We don’t tell advisors how to run their practices.”

The other major reason for the declining percentage of advisors who have financial planning designations is that the firms themselves are providing the advisors with more financial planning services. Several firms are taking the approach of giving their advisors access to the expertise their clients are requesting instead of requiring their advisors to acquire the expertise themselves.

Raymond James, for example, recently launched its new wealth-management services division, which incorporates various financial planning support services to advisors.

“I have the client fill out the form,” says a Raymond James advisor from the West, “and then I send it to a guy in Vancouver who enters the data into the software.”

And Montreal-based MacDougall MacDougall & MacTier Inc. launched its MacDougall wealth-management division this year in order to give its investment advisors access to planning specialists and to “package products in financial planning that appeal to clients,” says Tim Price, the firm’s president and CEO.

Vancouver-based Odlum Brown Ltd. has been offering financial planning services since 1990. The firm’s financial planning division now has four planners on hand to build plans for brokers’ clients as they are needed. Debra Hewson, Odlum Brown’s president and CEO, calls the division “a service centre, not a profit centre.” Advisors have the option of using the planning services as often as they like, free of charge.

Vancouver-based Canaccord Capital Inc. follows much the same model; it gives advisors access to a financial planner, either in the branch or at head office.

Kish Kapoor, president of boutique firm Wellington West, credits the bank-owned firms for pushing the financial planning envelope.

Mike Reilly, president and national sales manager at TD Waterhouse, agrees: “Financial planning is absolutely growing.”

The bank-owned dealers are realigning their brand identity, focusing on more holistic approaches to clients’ finances. TD Waterhouse took steps in this direction years ago, Reilly says, when it launched its investment wealth-planning process with “an expertise in financial planning, tax planning, wealth and estate planning, and all the areas.

@page_break@”The program,” Reilly adds, “allows advisors to bring in insurance, charitable-giving foundations and business succession planning.”

And it is a big reason why TD Waterhouse’s advisors have the greatest percentage of clients with financial plans.

ScotiaMcLeod is also taking steps in this direction; its brokers are now being called “wealth advisors” instead of “investment executives.”

The firm took this step, says Angus, to reinforce the concept that it is “asking advisors to have a broader view of their clients’ needs and structure their business in such a way that there are opportunities to look for insurance and financial planning solutions.”

According to Angus, Scotia-McLeod is looking for advisors to practice what he calls “our client commitment.

“That is to look at a more holistic approach,” he says, “rather than looking at just the clients’ investments.”

And, finally, in terms of a focus on financial planning, Toronto-based RBC Dominion Securities Inc. has “really ramped it up through 2007 and into 2008,” says David Agnew, the firm’s national director. The reason? “It’s what our clients are telling us in our client surveys,” he says. “It’s what advi-sors are telling us they need to retain and build their businesses.” IE