Traditional contingency planning is not a core need or priority for most branch planners and advisors with Canada’s Big Six, according to Investment Executive’s 2024 Report Card on Banks.
The advisors polled in this year’s research were asked whether they had a documented contingency and/or exit plan, should they become sick or unable to work, or if they retired. More than one-third of respondents (34.7%, or 91 advisors) said they had a documented contingency or exit plan, or were at least aware of a process at their bank for planning ahead regarding transitioning clients to a new advisor. However, the majority (65.3%, or 171 advisors) were unaware of any plans or processes at their banks.
The main reason for that unawareness was branch advisors don’t own their books or clients, meaning the onus falls to their institutions to ensure client service remains consistent even when an advisor departs.
“I can’t sell my book … because basically I’m an employee. It would be [me] giving notice, and they’d hire someone else to take my book,” said an advisor with Bank of Montreal (BMO) in Ontario.
“We don’t own our customers,” echoed an advisor in Quebec with National Bank of Canada (NBC), who also indicated their replacement would be chosen without their involvement.
“I think they have their own plan or system in place,” said an advisor with Bank of Nova Scotia (BNS) in Ontario.
“I do not have an exit plan in place but if I were to leave, I would feel confident my clients would be in good hands,” said an advisor in the Prairies with Royal Bank of Canada (where the retail branch advisors surveyed were all planners with RBC Financial Planning).
Statements collected from the six banks confirmed that the banks are generally responsibility when it comes to both contingency planning and continuity planning support for retiring advisors.
For example, clients with BMO have signed a “letter of commitment” outlining what they can expect from their financial planners, said Tony Tintinalli, head of specialized sales, Canadian personal banking, in an emailed statement.
If BMO clients are moved from one planner to another, the support and guidance provided “would not be diminished in any way” because financial planning leaders have “full access to the clients within [each] FP’s book,” he added. Whether a client moves to a new planner in the same BMO branch or in one nearby, there are “handoff and transition processes,” he said.
At other banks, the approach can depend on where and why the departing advisor is moving or unavailable.
Michael Walker, RBC’s vice-president and head of mutual funds distribution and RBC Financial Planning, said during an interview that clients with RBC are generally supported by a team that allows for contingency planning: “The financial planner is the lead in terms of that relationship with the client,” but there’s also an associate who can “step in for continuity with that client” should any emergencies occur.
If an RBC planner is moving to another role or division, they may be involved in conversations about their clients to ensure “a good [successor advisor] fit in terms of skills, capabilities and needs,” Walker said. However, “if the financial planner is leaving the organization, then obviously they wouldn’t be involved.”
Advisors want tools for planning ahead
Even though branch advisors don’t necessarily have to worry about where their clients land, some of those in the Report Card still planned ahead. For instance, a BNS advisor in British Columbia said, “I try to leave notes on all my clients’ profiles,” outlining “what we have done and what is next [in clients’ plans] so that the next advisor can pick up from where I left off.”
Client relationship tools that allowed for the entry of detailed client information were appreciated, according to an advisor with NBC in Atlantic Canada, as that meant “measures are in place to ensure as much continuity as possible.”
At BNS, preparation by exiting advisors is encouraged, said Scott Gamble, senior vice-president of retail performance with Scotiabank, in an emailed response. For a pre-planned absence, leave or change in advisor, he explained, “a collaborative effort between the [departing] advisor and management ensures a seamless transition and continuous transparency with clients.”
Where emergencies occur, Gamble added, branch managers and available advisors support one another in notifying clients and offering support.
At NBC, thorough documenting of clients’ financial plans is “non-negotiable,” said Tony Scalia, vice-president of investments with NBC, in an interview. That way, any advisor can” jump in and take over any file, on any given day.”
There even were advisors across the Big Six who told IE they’d accept more responsibility. An advisor in Alberta with Toronto-Dominion Bank (where the branch advisors surveyed were all planners with TD Wealth Financial Planning) said they’d like resources to help them keep every client document digitally organized and available for their eventual successor. That way, the successor could maintain the same level of service as the clients are used to.
Ryan McNally, senior vice-president, wealth advice distribution, with TD Wealth, said steps are in place for all scenarios. He cited “standardized processes” and “a centralized support team,” both of which allow for easy transitions for clients and advisors.
CIBC, where branch advisors work with CIBC Imperial Service, has launched a “teaming” pilot, said Rory Mitz, managing director and head, CIBC Private Banking, in an interview.
“What [the] pilot does is establish a second advisor on the same portfolio,” Mitz said, helping clients establish “a relationship with more than one advisor, which further mitigates a disruption in an advisor change.”
More than one CIBC advisor mentioned that project in the Report Card, with one of the bank’s advisors in Ontario saying, “[I] just brought on a junior advisor as part of [the] team pilot, which will help solidify succession plans.”
While succession planning is not at the forefront for many of this Report Card’s advisors — their average age as of 2024 was 41.2, while the planned retirement age they reported was roughly 18 years greater at 59.6 — proactive client care was still key.
After all, quipped one CIBC advisor in the Prairies, “If Lotto Max kicks in, [retirement] will be tomorrow.”