Firms’ stability puts advisors at ease

Adds an advisor in Ontario with Toronto-based Canadian Imperial Bank of Commerce: “When you look at the firm’s stability, we are back on track.”

Researchers Fiona Collie, Anna Olejarczyk and Dinah Zeldin spoke with 307 advisors at the Big Six banks and two credit unions. Advisors were asked to provide performance and importance ratings for 30 categories on a scale of zero to 10, with zero meaning “poor” or “unimportant” and 10 meaning “excellent” or “critically important.”

Individual ratings were then averaged for each category, both firm-wide and Report Card-wide. The “IE rating” shows the average of all categories for each firm, excluding the “overall rating by advisors,” which is how advisors rated their firms out of 10.

The advisors at the banks and credit unions who were surveyed for the Report Card have mutual fund licences and provide financial advice to clients on investment issues. They include advisors with titles such as “financial planner,” “personal banker” and “investment specialist,” among others.

It should come as no surprise that what these advisors value most has remained unchanged. “Firm’s ethics” and “firm’s stability” were once again at the top of the list, with overall importance ratings of 9.6 and 9.5, respectively.

But one thing advisors are placing higher value on this year is the “firm’s image with the public,” which, at 9.4, rose in relative importance to third place from fifth last year.

“The brand is important,” says an advisor in Manitoba with Toronto-based Royal Bank of Canada, “and I believe that is what helped us during the recession.”

TD remained in the top spot when it came to the firms’ public image, as TD’s advisors rated it at 9.5 in the category. TD advisors were proud of the image their bank has developed over the years.

Says a TD advisor in Ontario: “TD has a fantastic image with the public. The way we avoided the subprime mortgage crisis and weathered the storm during the crisis was top-notch.”

TD also remains high in the standings overall, taking top spot in nine categories in this year’s Report Card. TD also saw significant increases of half a point or more in five categories, including the “firm’s marketing support for advisor’s practice,” “client account statements” and “firm’s delivery on promises.”

“I can’t remember one time they didn’t come through on their promises,” says a TD advisor in Ontario.

But taking the spotlight this year is RBC, which was rated highest in 25 categories in the Report Card, including the “IE rating.” (It shared top ratings with TD in three categories.) Worth noting is that RBC advisors rated their firm a perfect 10 in the firm’s stability category.

“I think we’re the best Canadian bank, in general,” says an RBC advisor in Atlantic Canada. “Over the past few years, we’ve become stronger in the world. It’s a solid, reputable company.”
@page_break@The stability advisors experience is just one advantage of being with a large firm, says Michael Walker, vice president and head of branch investments with RBC. “The number of conferences that we have, which include the head of banking and the head of sales, as an example, have been held across the country and include a number of advisor roundtables. Having direct access to leadership goes a long way.”

Another bank on the upswing is CIBC. Over the past three years, the firm has continually pulled up its scores. This year, CIBC saw increases of half a point or more in four categories, including “firm’s corporate culture,” “support for developing a financial plan for clients” and “online account access for clients.” And although CIBC continues to have one of the lowest ratings in the public image category, its rating did improve to 7.5 from 7.1 last year.

“The banks always take a beating when it comes to public image,” says a CIBC advisor in Atlantic Canada. “CIBC took more bumps than the average bank [during the financial crisis, which] lingers in people’s minds. Our public image still needs some work, but we’ll achieve that over time.”

On the flip side, advisors with the most recent addition to the Report Card, Edmonton-based Servus Credit Union, were less than satisfied with their firm. Much of this dissatisfaction comes from the credit union’s 2008 merger with Community Savings and Common Wealth Credit Union, which resulted in the creation of the third-largest financial co-operative in Canada.

“It’s beyond two years since the merger,” says a Servus advisor in Alberta, “and my agreements have still not been completed.”

Servus is still going through growing pains since joining the Report Card last year. And, like many other firms in IE‘s Report Card series that have gone though mergers, Servus’s ratings have suffered: the credit union saw significant declines of half a point or more in 13 advi-sor-rated categories — including “firm’s delivery on promises,” which dropped to 6.5 from 7.8 in 2009.

Although the merger had taken place before last year’s survey, a Servus advisor in Alberta — who says he would not recommend the firm as a place to work — echoes his colleague: “It has been beyond two years since the merger, and what they promised to deliver has not been completed.”

Adds another colleague in Alberta: “They promised a lot of programs and changes that didn’t take place.”

The merger and a change in upper management were issues of concern for many Servus advisors. They pointed out the amalgamation was talking a lot longer than usual and that they are not being reassured by their management.

Says a Servus advisor in Alberta: “The CEO left, and it was not done in the best way. It seems like upper management just soaks up the large salaries without doing anything.”

But the firm is aware of these issues and is implementing a new business model. “The merger is coming together slowly,” says Ken Robinson, Servus’s assistant vice president, wealth management. “There were a lot of differences, especially on the wealth-management side. And, like any merger, you have to deal with people carefully and keep a lot of communication on the go, so it is a slow process.”

Servus was not the only firm to struggle in this year’s survey. In fact, Montreal-based National Bank of Canada saw its ratings decline by half a point or more in six categories, including “technology tools and advisor desktop,” “firm’s total compensation” and “ongoing training.”

National Bank advisors complained of technology that needed to be integrated, advertising that needs to be expanded outside of Quebec and a corporate culture that needs to be broadened.

“National Bank is a Quebec regional bank, so in Ontario and Western Canada, we are a work in progress,” says a National Bank advisor in Ontario. “A lot of decisions being made seem to be Quebec-based, which is a problem.”

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