For the most part, advisors surveyed in Investment Executive’s 2007 Planners’ Report Card are satisfied with their firms’ performance. And although they’re not quite as enthusiastic as their peers in the brokerage industry, planners remain upbeat.
The scores on page C4 also uncover a few revealing tidbits about financial planning firms. For starters, offering a dual platform doesn’t necessarily translate into advisor satisfaction. This year’s three top-placing dealers — PFSL Investments Canada Ltd., Sentinel Financial Management Corp. and Investors Group Inc. — all eschew the securities platform in favour of mutual funds and insurance sales.
Second, being based outside Canada’s financial hub appears to hold some advantages. Even though front-runner PFSL is headquartered in Mississauga, Ont., arguably an extension of Toronto, Sentinel is based in Saskatoon and Investors Group in Winnipeg — more than a stone’s throw from Bay Street.
But that’s where the similarities between the top-scoring firms end. Each one caters to a distinct type of advisor, and the companies’ respective successes depend on how well advi-sors fit within each firm’s culture and business model.
Perennial top-scorer PFSL once again garnered praise from its advisors, who say the firm’s performance in ethics, stability and strategic focus — among other things — are second to none. But PFSL’s real success lies in its advisors’ belief in the firm’s motives: primarily helping everyday Canadians manage their money.
“The firm is on a crusade to serve people,” says a PFSL advisor in Ontario. “There is a huge opportunity for personal growth and income. The atmosphere is great. It’s very family-oriented.”
Adds another Ontario advisor: “Clients come first. We do what’s right to help people become debt-free. It’s great to have your values in line with the company’s.”
Although most firms define themselves by what they offer, PFSL’s merits may be best understood by what it doesn’t offer. For instance, the firm doesn’t do any consumer advertising to speak of. And while other dealers are pouring money into support staff and services for tax, estate and insurance planning, PFSL relies on its manufacturing partners to fill in the gaps. The firm has no plans to offer an Investment Dealers Association of Canada channel, and it isn’t fretting over the possibility of losing clients to a full-service dealer.
To top it off, even though PFSL is always on the lookout for new advisors, it doesn’t pay signing bonuses. Instead, the firm is channeling its resources into the areas that advisors value most. PFSL advisors are clearly won over by the firm’s ethics, a nod to the compliance department that president and chief marketing officer Jeff Dumanski calls “proactive.” PFSL advisors also gave top marks to the firm’s unique compensation structure, which is tiered according to rank and pays an override to those who bring in new advisors.
Perhaps most important, though, is the way the firm markets itself — as a place for its almost 5,000 mutual fund-licensed advi-sors to grow their businesses as independent entrepreneurs.
“Essentially, you’re your own boss,” says Dumanski. “You must comply with our rules and regulations; but the way you run your business, when you get up, when you do your training — those types of things are at your own control. We’re trying to show that there’s a lucrative market out there and you can live out some of your dreams here.”
At the other end of the spectrum is Sentinel, led by no-nonsense president and chief compliance officer Merlin Chouinard. With only 47 advisors and a regional presence limited to Alberta and Saskatchewan, the firm managed to pull off some of the highest scores across the board in back-office support, freedom to make objective product choices, corporate culture and the firm’s stability. The last item doesn’t come as much of a surprise; the firm has been around since Chouinard himself started up managing general agent Sentinel Life Management Corp. in 1981, before building up the mutual fund dealership in 1994. In 1996, he rounded things out with Sentinel Mortgage Corp., which specializes in retail mortgages for homeowners.
But like PFSL, part of Sentinel’s success undoubtedly lies in attracting the right advisors.
Although executives at other firms commonly spout off vague attributes such as “independent” and “entrepreneurial” in describing their ideal advisors, Chouinard doesn’t mince words: “The ideal advisor is 52 years of age, has anywhere from $15 million to $25 million under management, he’s a CFP, he has his securities course, he’s licensed to sell life insurance and he has 25-plus years experience.”
@page_break@Chouinard is just as specific when it comes to an ideal book, which he describes as 30% insurance and 70% mutual funds and exempt products. Back that up with what the advisors think is superior support for insurance planning — “That’s really our background,” Chouinard says — and Sentinel’s advisors are a satisfied bunch.
“This firm has a helpful atmosphere. There’s a lot of co-operation and the advisors with tenure aren’t money grabbers. They’re more than happy to help out with your business,” says a Sentinel advisor in the firm’s home province.
“They appear to have their ducks in a row. They’re very stable,” says another advisor in Saskatchewan.
Taking the third spot is Investors Group, whose 8.3 overall score just barely edged out Toronto-based Dundee Wealth Management Inc. (8.1) and Waterloo, Ont.-based Manulife Securities International Ltd. (8.0).
Interestingly, the scores at Investors Group are declining this year. Categories such as consumer advertising and support for wills and estate planning slid by about half of a percentage point, while the scores for advi-sors’ relationship with the compliance department took a 1.2-point dive to 8.3.
Still, the firm’s advisors are satisfied enough to award the firm with higher than average scores in ongoing training, strategic focus, corporate culture and image with the public.
For many Investors Group advisors, the sheer size and stability of the firm are deemed its best aspects. “We are big, solid and financially stable. It’s great,” says an advisor in British Columbia.
“The best part is that we’re nationally recognized,” says another Investors Group advisor in Newfoundland and Labrador.
The firm’s dedication to ongoing training isn’t lost on its advisors, either. Long known for accommodating rookies with educational programs and tools, Investors Group scooped up an 8.6 performance score for ongoing training — second only to PFSL.
“The firm has seven levels of training. And after seven years, it will look at your book to see where you are and how it can assist you further,” says an Investors Group advisor in Ontario.
Although overall scores in 2007 remain steady for the most part, a few firms managed to pull up their ratings significantly. Advisors at Markham, Ont.-based Professional Invest-ments Services (Canada) Ltd. , formerly known as Generation Financial Corp., appear to be thriving under its new management structure. Around this time last year, the firm’s 100-plus advisors were just starting to adjust to the arrival of new president Ken Parker; then, in November, the firm was snapped up by Professional Investment Holdings Group, Australia’s largest mutual fund dealer.
Now headed by president and CEO Ken Rousselle, PIS is making an impressive comeback. Advisors rated the firm’s strategic focus an 8.2, a giant leap from the 6.0 rating they doled out in 2006. A large part of PIS’s new strategy is one that has been adopted from its Australian parent, whose advisors partner with small and mid-sized accounting practices as a means of tapping into new clients. The new plan appears to be winning over advisors.
“It really seems like it’s getting its act together since the takeover,” says a PIS advisor in Alberta.
The firm has also managed to pull up its scores in stability and corporate culture, two categories that are highly subjective and in which generous scores usually indicate satisfaction with the firm as a whole.
Scores are also creeping up at Desjardins Financial Security Independent Network, the newly branded advisory base formerly known as Laurentian Financial Services. Advisors gave the Lévis, Que.-based firm significantly higher scores in its delivery on promises, strategic focus and consumer advertising.
Meanwhile, advisors at Toronto-based Assante Corp. awarded their firm with markedly improved scores in the firm’s delivery on promises, technology tools, consumer Web site and support services for tax planning and wills and estate planning, among others.
The firm’s success is largely owing to its focus on being a “full-service, full-support wealth-management company,” a strategy the firm is pursuing to capitalize on a growing trend in family wealth, much of which is generated by entrepreneurs who are beginning to sell off their businesses. Chairman and CEO Joe Canavan says the more his firm can cater to the growing needs of that segment of the population, the better.
“Lots of firms pretend to be wealth-management companies, or their advisors pretend to be wealth managers. But, really, all they do is flog mutual funds,” he says. “We actually provide wealth-management services, whether it’s wealth planning, estate planning, insurance planning or tax planning — we can do it all. That’s not lip service.”
Advisors appear to be taking notice of the firm’s efforts. Says one Assante advisor in the Maritimes: “The calibre of the support services and management team allows me to run an efficient, entrepreneurial business.”
“If I need in-depth expertise, it’s there,” adds an Assante advisor in Ontario.
Likewise, advisors at Dundee and Manulife are notably more satisfied this year than last. At Dundee, significantly higher scores in support services buoyed the firm’s overall score. Meanwhile, Manulife advisors gave their firm higher marks in almost every category, with significantly higher scores in corporate culture, ethics and delivery on promises. IE