Most planning firms offer banking products as a way to broaden services and convenience to their clients — and to keep assets in-house and parked nearby. But the breadth of banking product choices varies widely among the firms. While some companies offer a full suite through their own banking subsidiaries, others offer an array of products via outside suppliers, and still others offer little at all.
Two firms in Investment Executive‘s 2006 survey boast their own stand-alone banking subsidiaries. Manulife Securities International Ltd. , based in Waterloo, Ont., provides its clients with banking products through Manulife Bank, which was established in 1993 and has $6 billion in assets. Advisors with Dundee Wealth Management Inc. of Toronto can use products from Dundee Wealth Bank, which launched last year. It has approximately $100 million in assets.
Through the banking arm, Manulife advisors can offer clients bank accounts, including chequing, savings and business accounts, GICs, credit cards, mortgages and lines of credit. Manulife Bank also features a product called Manulife One, which allows customers to combine savings and debt instruments, including mortgages, into one account, which can then be used as a regular chequing account, with debit cards, pre-authorized withdrawals and automatic deposits.
“I would argue that our banking products are some of the best in the world — definitely in Canada — for our advisors to sell,” says Rick Annaert, president and CEO of Manulife Securities. He maintains his firm’s suite of banking products gives it an edge over other planning firms.
The fledgling Dundee Wealth Bank has ambitious plans for expansion through Dundee’s network of about 1,900 advisors, as well as via the Internet and phone. Dundee Wealth Bank currently offers a modest suite of bank accounts, GICs and mortgages, but the bank plans to expand its offering of products by the fall. Dundee advisors contacted for this survey reserved judgment on the banking arm, saying it was too early to say if it will be a success.
Most of the other planning firms in this year’s Planners’ Report Card offer an array of banking products through partnerships or referral arrangements with one or more third-party providers.
Mississauga, Ont.-based Investment Planning Counsel offers a wide variety of banking products, such as high-yield chequing and savings accounts, GICs, residential and commercial mortgages, lines of credit, loans and credit cards, derived from referral arrangements with nine outside suppliers, including B2B Trust, a subsidiary of Laurentian Bank of Canada.
“Our biggest competition is the banks, so IPC Save allows us to compete with them and beat them at their own game,” says Chris Reynolds, president of IPC. “The business is growing quite dramatically. We do almost $20 million a month in mortgages.”
Winnipeg-based Investors Group Inc. offers a program of products, including chequing and savings accounts, credit cards and lines of credit, called Solutions Banking through an arrangement with Montreal-based National Bank of Canada.
“The advantage, from the consultant’s or advisor’s point of view, is that he or she is not required to be involved in the management or delivery of the product or service,” says Kevin Regan, executive vice president of financial services for Investors Group.
Burlington, Ont.-based Berkshire Investment Group Inc. has a limited number of banking products through arrangements with outside providers and is looking for other “strategic relationships” with third-party suppliers to broaden its offering, says Craig Henshaw, vice president, operations and IT. But Berkshire also says supporting the independence of its advisors is critical, so it isn’t interested in owning a banking subsidiary.
“We don’t want to have a majority controlling interest in any manufacturer,” adds Geoffrey Charlton, the firm’s executive vice president. “Berkshire wants to continue with its mandate, which is: when a Berkshire advisor sits in front of his client and does his financial review, the recommendations made are completely unbiased.”
Toronto-based Assante Corp. entered into a referral agreement last year with Manulife Bank, which saw Assante advisors get access to banking products, including the Manulife One product, for their clients.
Mississauga, Ont.-based PFSL Investments Canada Ltd. offers GICs through an arrangement with AGF Trust Inc. , but PFSL views this primarily as a way to retain assets for future investments.
“For those clients who are insistent on having GICs, we can accommodate that,” says Jeff Dumanski, PFSL’s president and chief marketing officer. “It also allows us to continue the conversation with that client and educate them on the advantages of higher potential returns in mutual funds and segregated funds with varying degrees of risk.”
@page_break@Regina-based Partners in Planning Financial Services Ltd. offers GICs, mortgages and debt instruments through referral arrangements with outside suppliers.
Markham, Ont.-based FundEx Investments Inc. , Toronto-based Laurentian Financial Services, and Montreal-based Peak Investment Services Inc. prefer to keep the emphasis on their core financial planning services. IE