Deposit-taking institutions are placing greater emphasis on having their advisors develop financial plans for their clients. In fact, many advisors surveyed for this year’s Report Card on Banks and Credit Unions say their firms are now setting baseline goals for developing financial plans for their clients — and advisors say they are feeling the pressure to deliver.
Given this changing paradigm, it should come as no surprise that advisors consider their firms’ “support for developing a financial plan for clients” more important to their businesses. Case in point: the category had the largest increase in the average importance rating, rising to 9.1 from 8.5 in 2009.
Also worth noting is that the firms are, in fact, delivering on this support, as advisors at four banks rated their firms higher by a half point or more in the category. This is also evident in the percentage of advi-sors’ clients with a financial plan in place, which has increased to 48.3% this year from 41.7% in 2009.
One of the banks putting a major focus on financial planning is Toronto-based Royal Bank of Canada. And it appears that the support the bank is offering advisors is spot-on, as they rated it at 9.4 — not only the highest among all firms in the survey, but also 1.2 points higher than the bank’s 8.2 rating in 2009.
“We are putting a significant focus on [financial planning] in terms of setting the objectives and targets around the number of financial plans we are looking for the advi-sor or financial planner to complete on an annual basis,” says Michael Walker, vice president and head of branch investments for RBC.
Specifically, Walker says, the bank has set targets for completing new financial plans each year. The baseline ranges from 32 to 40 financial plans a year — and he’s confident that meeting these minimum targets is realistic.
“In my role, I’m forced to do [financial plans],” says an RBC advi-sor in Alberta, adding that the bank “gives us the tools to do them, and the software is improving.”
Adds a colleague in Saskat-che-wan: “The resources that [RBC] has [available] for assisting us are pretty phenomenal. There’s all kinds of people to help with structuring a financial plan and user-friendly software programs.”
Advisors with Toronto-based Canadian Imperial Bank of Com-merce, who rated their firm at 8.7 in the category, also report that their bank is encouraging them to create financial plans for their clients. Says a CIBC advisor in British Columbia: “They really want to make sure every [client] has a financial plan. They’re always tracking it and giving us [the necessary] tools and support to get them done.”
Overall, advisors at all firms that rated highly in the category say that having robust, comprehensive tools and in-depth financial planning software make it easy to create financial plans for their clients.
@page_break@Toronto-based Bank of Montreal drew positive reaction from its advisors for its financial planning software. Rolled out in early 2009, the NaviPlan platform received mixed reviews when it was first introduced. However, advisors have been warming up to it during the past year.
“NaviPlan is a very flexible, very much in-depth and all around great tool,” says a BMO advisor in Ontario. “[The bank] is always updating the tool and training us on it.”
“[NaviPlan] is quite robust,” says Ross Kappele, co-president with Toronto-based BMO Investments Inc. “We have had very good success with this software.”
Another firm that finally appears to be on the right track in terms of financial planning software is Montreal-based National Bank of Canada. The firm rated lowest among the Big Six banks for its financial planning support and some advisors still complain of “tedious” or “inadequate” software. But its rating increased to 7.3 this year from 6.7 in 2009, and many advisors point to the software and the firm’s focus in this area as the reasons.
“The bank provides the training on the software and on the presentation,” says a National Bank advi-sor in Ontario, “and it makes sure we get regular software upgrades.”
Adds a colleague in Quebec: “The firm has a very sophisticated program for financial planning. It takes many factors into consideration and provides a very personalized plan.”
National Bank is developing a very strong focus on financial planning, says Marguerite Pernice, senior manager at the bank’s regional centre in Montreal, adding, “It is a [growing] priority for us over the next few years.”
Meanwhile, advisors with Edmonton-based Servus Credit Union are much displeased with their firm’s financial planning support, as they rated it a lowly 4.8 — down by a dramatic 2.1 points from an already subpar 6.9 in 2009.
In particular, Servus advisors cited the lack of a firm-specific financial planning tool as the reason for their unhappiness. “They talk about it, but we don’t have the tools,” says a Servus advisor in Alberta.
Ken Robinson, Servus’s assistant vice president, wealth management, confirms that financial planning hasn’t been a strong focus at the credit union, but adds: “As we develop our service standards, having an advisor do a [financial] plan [for clients] will certainly be something we expect.”
IE