Increasingly, risk-conscious clients are turning to financial plans that set out objectives, risk tolerance and a prescribed asset mix to produce a healthy return while smoothing the ups and downs in the markets.
So, it’s no surprise that financial advisors are placing a greater priority on developing a financial plan, as the overall importance average for the “support for developing a financial plan for clients” category has risen to 8.3 from 8.0 last year.
The overall performance average given to firms for this support also increased slightly, to 7.8 from 7.6 last year. However, the discrepancy between the performance and importance numbers indicate a gap between the way some advi-sors would like to be supported by their firms and the level of support they feel they are actually receiving.
Many advisors complain of financial planning software that is too complex and difficult to use, as well as a lack of backup and training on these tools.
But, as always, there are firms that stand above the rest — and this category is no exception. Advisors with Toronto-based Richardson GMP Ltd. rated their firm highest in the category, at 9.2, because the company has brought in the best elements of its two predecessor firms, Richardson Partners Financial Ltd. and GMP Private Client LP, which merged last autumn.
“It’s a new firm,” says a Richard-son GMP advisor in Ontario, “but the financial planning group does some of the most in-depth work I’ve ever seen.”
“When you put two organizations together, you get to take advantage of strengths that one firm may have had, and then put it together so everyone can then share,” says James Werry, CEO of Richardson GMP. “Richardson Partners was started from a philosophy that stemmed from the Richardson family itself. It is one of Canada’s wealthiest families, and they have a long history of intergenerational wealth transfer.”
This expertise is something all advisors at the newly merged firm can now draw upon, Werry adds.
Advisors with Mississauga, Ont.-based Edward Jones, Toronto-based RBC Dominion Securities Inc., Winnipeg-based Wellington West Capital Inc. and Vancouver-based Odlum Brown Ltd. also praised their firms for their financial planning support.
The source of Edward Jones’ advisors satisfaction is a custom-designed, proprietary software program called Financial Assessment and Solutions Tool.
“It’s great software, and it’s always evolving,” says an Edward Jones advisor in Saskatchewan.
Adds a colleague in Ontario: “We used to deal with off-the-shelf software, but we now have our own from the U.S. parent firm — and it’s very professional.”
Gary Reamey, principal and head of Edward Jones in Canada, says the goal of developing such software “is that every client has a financial plan.”
The results of this year’s survey show that the firm is making progress toward that goal, but it still has a long way to go. On one hand, 91.5% of Edward Jones advisors say they develop plans for clients, which is the highest percentage in the survey; but only 30.4% of their clients, which is among the lowest, actually have a financial plan.
Advisors with DS rated their firm higher in the category this year, at 8.6 vs 8.2 in 2009. The reason? David Agnew, DS’s CEO and national director, says the firm has various desktop applications that focus on financial planning, including a program called Family Snapshot that enables advisors to help clients plan across multiple family generations.
“As a firm, we are supporting all these programs. We’re spending money on them because, really, it’s what our clients are asking for and what our advisors are asking for,” he says. “And we are talking about it. We are trying to educate our clients and our advisors as to what we have.”
Furthermore, DS has been making holistic wealth management a priority for the past five years, Agnew says. Aside from computerized tools, the firm also has an internal wealth-management services team devoted to helping advisors offer value-added planning services beyond investment management. Qualified professionals meet clients’ specialized needs in such areas as tax planning, philanthropy, business succession and estate planning. The team includes more than 90 accountants, lawyers, high net-worth specialists, will and estate consultants, and tax planners.
Meanwhile, advisors with Toronto-based BMO Nesbitt Burns Inc. rated the firm in the middle of the pack (7.8) for its support in developing clients’ financial plans.