Although the financial advisors surveyed for Investment Executive‘s annual Report Card on Banks typically cater to the needs of mass-affluent clients, most survey participants were confident that they and their banks are prepared to help wealthier clients when required.
That most banks are on track in this area was evident in the overall average performance rating of 8.5 advisors gave their banks in the “products and support for high net-worth clients” category.
The industry standard to be considered a high net-worth (HNW) client is either $500,000 or $1 million in investible assets. But, at the bank branch level, advisors can access specialized support services for clients who have complex needs. In addition, clients with at least $250,000 in investible assets can access special products available only to them. (Advisors also have access to other divisions within their banks, such as the brokerage and the private bank, to help HNW clients.)
Advisors with Toronto-based Canadian Imperial Bank of Commerce’s (CIBC) Imperial Service division believe they are well prepared to help clients who have more complex needs. Thus, they gave that bank a rating of 9.3, the highest in the category.
“We bring in experts from all over to support [HNW clients],” says a CIBC advisor in Ontario. “Clients feel we understand their situations and we can help them.”
Specifically, CIBC’s advisors have access to the bank’s financial planning and advice centre’s support line, which was upgraded recently. CIBC hired more staff for the support line, and the centre’s staff call advisors proactively to review a client’s financial plan.
“We have had that support for a while, but we’ve taken it a step further this year,” says David Nicholson, vice president, Imperial Service, with CIBC.
Toronto-based Royal Bank of Canada (RBC), which received the second-highest rating in the category, at 9.0, also recently stepped up its focus on taking care of wealthier clients’ needs.
The bank now offers the RBC Investment Advantage Account, a retail, fee-based account with tiered pricing for clients with a minimum of $250,000 in investible assets. This asset level can be reached by family members pooling their investment accounts.
“We’re getting a lot of great feedback,” says Michael Walker, vice president, branch investments, with RBC. “We’re already getting more than $15 billion in assets [under management], and that’s primarily through our financial planning channel.”
“This tiered account is the best thing we’ve seen in a while,” says an RBC advisor in Atlantic Canada. “It’s been a long time coming.”
A tiered fee structure also was one reason many advisors with Montreal-based National Bank of Canada were pleased with their bank’s support for HNW clients, which advisors rated at 8.1. The bank offers a private wealth-management solution for clients with a minimum of $250,000 in investible assets (for which assets pooled by family members can qualify).
“By amalgamating the assets, [clients] can benefit from many things – in terms of banking services, as well as fees – because the more assets [clients] have, the lower the [fee] is,” says Nancy Paquet, vice president, investments, with National Bank.
“[The HNW support is] well managed,” says a National Bank advisor in Quebec. “There are bank discounts available. It’s really good, overall.”
In the case of Toronto-based TD Wealth Financial Planning, a division of Toronto-Dominion Bank, its advisors also have access to wealth-management specialists via a call centre or email in order to serve clients with more complex needs. Clients also can meet with investment specialists face to face to get help in building a portfolio. Yet, some TD advisors believe their bank’s offerings for wealthier clients fall short, as the bank garnered a rating of only 7.7 in this category.
Says a TD advisor in British Columbia: “[The bank] can be doing a lot more to compete.”
Still, most of TD’s advisors noted that there are other divisions within the bank that concentrate on taking care of HNW clients and to which advisors can refer these clients. In fact, TD Wealth Financial Planning offers compensation when advisors make such referrals.
Advisors with RBC, CIBC and Toronto-based Bank of Montreal (BMO) have similar arrangements through which they can refer clients to other units within their banks – such as their brokerage, private banking or private counsel divisions. All three banks offer compensation to their advisors for such referrals, although at BMO, that depends on the circumstances.
“My interactions with both [BMO] Nesbitt Burns [Inc.] and [BMO Harris] Private Banking, [have been] excellent,” says a BMO advisor in Ontario.
“If we get to the point at which [I can’t offer] what a client needs,” adds an RBC advisor in B.C., “I get access to partners [within the bank].”
RBC’s advisors made more than 3,000 HNW client introductions to partners at RBC Dominion Securities Inc. or RBC PH&N Investment Counsel in 2017, says Walker: “[This is] a core part of [advisors’] ongoing relationships and a core part of the role.”
Advisors with Toronto-based Bank of Nova Scotia, who rated their bank’s HNW support at 8.2, also are quite happy to refer clients to other divisions in the bank, although advisors aren’t compensated for such referrals.
“We have an excellent program for wealth management,” says a Scotiabank advisor in Ontario. “We have a system at the branch in which we identify those clients and refer them.”