With so much un-certainty in the markets, the last thing advisors want to worry about is uncertainty at their firms. So, it’s not surprising that the firms that advisors feel have vague strategic focuses or rocky foundations were handed lower ratings in this year’s Dealers’ Report Card.
Advisors with Toronto-based DundeeWealth Inc. rated their firm lower by a half a point or more in eight of 31 categories, while advisors with Regina-based Partners in Planning Financial Services Ltd. rated their firm lower by the same margin in 10 categories. (See table on page C1.) Advisors cited concerns relating to their firms’ ownership or leadership — or, as in the case with PIP, both.
PIP was acquired in March 2007 by ECI Investments Ltd. , a subsidiary of Calgary-based holding company InterBorder Holdings Ltd. PIP advisors rated the dealer’s stability an 8.5 in 2008; this year, that rating fell to 7.9 — mostly because advi-sors are concerned that the firm is about to change hands yet again.
“Over the past seven years, we have merged and been bought a few times,” says a PIP advisor in Nova Scotia. “You never know where we will go next.”
“We did take a look at selling and merging the firm in the fall of 2008,” says Bill Doherty, PIP’s CEO. “But we have made a decision that we are not going to sell and we are not going to merge; in fact, we are going to be building up PIP.”
Another related concern for PIP advisors was a void in the firm’s leadership created by the departure of Hugh Gabruch, general counsel and chief operating officer. Several advisors expressed concern about the challenges his departure represents during these difficult times.
But in May, soon after the research for this year’s Report Card concluded, Doherty announced the appointment of Dean Lower, InterBorder’s executive vice president, as PIP’s president.
There’s also concern about PIP’s marketing support for advisors’ practices, which took a tumble to a rating of 4.3 this year from an already low 5.2 in 2008.
“If we go out and do our own advertisements,” says a PIP advisor in Saskatchewan, “we get nothing in terms of support.”
However, PIP scored well with advisors in several categories. For instance, even though advisors say the firm’s technology tools are not yet perfected, they rated the firm a 7.0 in the category, a significant improvement from 6.2 last year.
“They are good at getting it, but there are always some bugs,” says a PIP advisor in Saskatchewan about the firm’s technology.
DundeeWealth advisors are also concerned about their firm’s focus. Primarily, advisors complained about executive turnover. The firm’s ratings in strategic focus and corporate culture reflect this as both fell by 0.6 of a point this year.
“They need to work on staying consistent,” says a DundeeWealth advisor in Ontario. “There have been changes in our corporate structure. I think we’ve lost our original strategy.”
Adds a colleague in the same province: “They’ve cut middle management in half.”
At the end of September 2008, DundeeWealth said it was replacing Dan Brintnell and Jim McClocklin, former executive vice presidents and co-heads of its retail division. John Panneton of Goodman Private Wealth Management DundeeWealth’s investment-counsel firm, has moved into the role of executive vice president of distribution and investments.
DundeeWealth made additional changes in November 2008. It sold its Quebec network of about 400 mutual fund and insurance advi-sors to Quebec City-based Industrial Alliance Insurance and Financial Services Inc. and reduced staff by 250, or 16%, mostly in operations, IT and administration.
“From a stability standpoint, the people the advisors deal with day to day in the field haven’t changed,” says Gordon Martin, senior vice president of DundeeWealth’s retail division.
He says that regional vice presidents are still in place and management is communicating with advisors about the changes.
But the impact of the layoffs among support staff has trickled down to advisors, who are feeling the pinch. “They have cut back in knowledgeable staff support due to the market crash,” says a DundeeWealth advisor in Ontario, “which has put a strain on my business.”
But DundeeWealth advisors gave the firm credit where they felt it was due. They raved about their independence and the firm’s impressive array of products.
@page_break@”The product shelf is the best I’ve ever seen,” says a DundeeWealth advisor in Nova Scotia, “and our technology is above other dealers.”
Accordingly, DundeeWealth advisors rated their firm’s technology tools a 7.8 this year, a 0.6-point jump from 7.2 in 2008. IE