It has been four months since Waterloo, Ont.-based Manulife Securities International Ltd. amalgamated with Burlington, Ont.-based Berkshire-TWC Financial Group, creating two new firms with expanded sales forces. In the process, Manulife has taken steps to formalize its independent branches and offices.

Under the new independent model, offices that have four or more advisors will be recognized as associate branches, while those with three or fewer advisors will be recognized as associate offices.

“The independent model really makes sense,” says Rick Annaert, president and CEO of Manulife Securities Investment Services Inc., “and there are certain markets out there that, as a dealer, you really want to get into.”

On July 2, Manulife Securities International and Berkshire Investment Group Inc. — both members of the Mutual Fund Dealers Association of Canada — merged to become Burlington-based Manulife Securities Investment Services, which became home to 1,100 advisors.

At the same time, investment dealer Berkshire Securities Inc., a member of the Investment Industry Regulatory Organization of Canada, was renamed Manulife Securities Inc. This firm now houses about 400 securities-licensed advisors.

As part of the post-merger reorganization, the head offices of both firms were moved to Burlington.

“The rebranding of the companies went exactly according to plan,” Annaert says. “Even as we speak, signs are going up all across the country with our new names.”

Both new companies are still developing an advertising program that will be launched either late this year or early in 2009. Before the integration, neither Manulife Securities International nor the Berkshire firms did very much in the way of advertising. But Annaert plans to change that. He would like to incorporate advertising as part of the rebranding process.

So far, the integration has been running smoothly, Annaert says, with both advisors and clients responding positively. One reason for this is that both groups already had strong independent advisor models.

Advisors at both the IIROC and the MFDA dealers have the option of choosing from two compensation models. The associate model consists of independent offices in which advisors are responsible for their own rent and overhead but get to keep more of the revenue they generate. As well, there are five corporate offices in Canada, in which the dealer is responsible for costs and the advisors in these offices work within a traditional — but lower — compensation grid.

ADVISORS’ CHOICE

Advisors from both former firms are able to choose whichever model they prefer and can switch models if they so decide at a later date.

“You might start by opening a corporate office and get a foothold in that market,” Annaert says. “In time, the advisors who are in that office might want to take their business to an associate branch and move into the independent model.

“Formalizing the independent offices is a way for us to enter into new markets or new areas in which we don’t have penetration,” he adds. “Hopefully, we recruit into those corporate branches and, from there, away we go.”

Along with the amalgamation, Manulife Securities Investment Services adopted Berkshire Secu-rities’ back office, which runs off the Broadridge Dataphile platform. For Annaert, this means training 800 advisors on a new system.

Of those 800 advisors, 500 of them are now using the old Manulife Securities International platform. Over the next four to six weeks, Annaert says, he will have those 500 advisors certified on the Dataphile system. The remaining 300, who are currently doing business on paper, will complete their training after the 2009 RRSP season.

“We are doing our best to accommodate our advisors,” he says, “and make it as seamless as possible.”

In addition to training advisors on Dataphile, all client information has to be converted onto the system, which is being done over three separate weekends.

“We had a very clean weekend on the first conversion,” Annaert says. “So, we are hopping along nicely.”

And how are advisors feeling about all this movement during a very unpredictable time?

“Very well,” Annaert says. “We have been going through some turbulent times in the past month with the markets. But all advisors are feeling very comfortable, saying that their dealership is Manulife and that we are backed up by a large parent company.”

EXPERIENCED BACK OFFICE

The merged companies have increased the number of people in their joint call centre and processors, to make sure that nobody sees any degradation of service and that everyone feels confident in their back-office staff, knowing that they came from Berkshire and have already been using the system for 10 years.

@page_break@“At most dealers that go through a conversion, both the advisors and the back office are new and learning together,” says Annaert. “But we are lucky that if an issue pops up for an advisor, our back-office staff has virtually seen all types of situations and has quick remedies for them.”

Although Annaert admits it is tough to ask people who are interested in joining the firm to wait until after the RRSP season, he is still adamant that he will continue to focus on his current 1,500 advisors having a seamless transition into the new system before bringing in any more talent.

“We have told people we will not be bringing in anybody new through the autumn,” Annaert says, “because we are focused on our existing advisors, getting the conversion done and getting the integration completed — and making sure all of our existing advisors’ clients are serviced well.” IE