With few exceptions, the firms surveyed in Investment Executive’s 2007 Advisors’ Report Card are promoting the idea of the full-service advisor.

But as an increasing number of brokers, planners, account managers and insurance advisors aim to become all things to all people, is any one channel equipped to dominate across all product streams?

The answer is “yes,” according to Paulette Filion, partner at Silver Bullet Target Marketing of Toronto. But it may not be the channel you think it is.

“Many people believe that planners are best positioned to become full-service advisors,” Filion says. Instead, she says, it’s both advi-sors at the bank-owned investment dealers and account managers who are ramping up their offering.

“The banking industry is developing a more relationship-oriented approach to clients, especially at the high net-worth level,” Filion says. “They are getting organized to serve that level of investor.”

Advisors in that channel also have access to one thing the majority of non-bank advisors don’t: banking products, which Filion deems essential for client retention.

But while advisors at bank-owned dealers may have the potential to dominate the full-service marketplace, IE’s research shows that isn’t happening — yet. Even though 62% of investment advisors hold insurance licences, only 41% report revenue from insurance product sales.

Filion admits that the transaction-oriented culture of many brokerages can be difficult to overcome. “Still, more and more brokers are realizing that to serve their better clients, they can’t be on a strictly transaction-based system,” she says.

While the transaction-only broker will never be a dying breed, Filion sees an increasing number of investment advisors who are connecting the dots among stocks, mutual funds, insurance and banking products. “They’ve become the point guys,” she says. “Their job is to get to know the organization, know the resources it has available and bring those resources to the table when they are needed.”

That’s the case at TD Waterhouse Private Investment Advice. “Our clients know we’re not only helping them with their planning and investments, but also with charitable giving, estate planning, tax planning, investment banking and insurance,” says Mike Reilly, the Toronto-based firm’s president and national sales manager. “We’re doing this better than anyone else on the Street.”

A TD Waterhouse advisor from the East Coast concurs: “The firm is really focused on delivering a total package to our clients.”

Planners, however, are also focused on the full package: 77% of those surveyed by IE are dual-licensed, able to sell both mutual funds and either insurance or securities. Another 20% are licensed to sell across all three product streams.

Nevertheless, Filion worries that not all financial planners are living up to their title. “Research shows that many clients of financial planners do not have a written plan,” she says. “If the planners don’t develop and maintain a written plan for all their clients, they will eventually lose the business to those who do provide this service.”

As it stands, 47% of planners hold the certified financial planner designation, compared with 35% of account managers and 22% of brokers. “The banks aren’t completely there yet, but they are investing heavily to move their sales people in the direction of financial planning through their product offering, training on how to develop a financial plan and via educational licensing,” Filion says.

Unlike the CFP, demand for a securities licence isn’t great in the planning channel. “Our advisors don’t want to become stock-oriented,” says Kevin Regan, executive vice president of financial services for Winnipeg-based Investors Group Inc. However, an insurance licence remains a hot commodity.

“More and more advisors are seeing that insurance helps with their revenue stream,” says Mark Kent, president of Calgary-based Portfolio Strategies Corp.

Indeed, 80% of planners surveyed reported revenue from the sale of insurance products. “It doesn’t matter what’s happening in the market,” adds Kent, “because they have the ability to go and talk to their clients about products that aren’t market-related.”

Executives at Assante Corp., Manulife Securities International Ltd., Investment Planning Counsel and Worldsource Financial Management Inc. agree. “We recommend that our advisors consider adding insurance to their businesses,” says Andy Mitchell, president and chief operating officer of Markham, Ont.-based Worldsource. “Our view is that the wealth-management model is going to see financial planners dually licensed and able to manage all the needs of their clients rather than being just mutual funds salespeople.”

@page_break@While 91% of planners are licensed to sell insurance, only 69% of insurance advisors are licensed to sell mutual funds. What’s more, their average book size for investment products is $13.3 million — the smallest across all four channels.

As with stockbrokers selling insurance, Filion says, insurance advisors’ reluctance to offer investment products is a question of culture: “While their sales cycle may be longer, once a sale is done, it’s done, and there is very little need for them to revisit the client.”

Nevertheless, the majority of insurance firms surveyed encourage their agents to become licensed to sell mutual funds. “As a firm, we would like to make sure they are offering all financial security products to their clients,” says Leander Dueck, senior vice president of individual distribution for Winnipeg-based Great-West Life Assurance Co.

“It is our expectation when we hire a principal that they are working on both their CFP and their chartered life underwriter,” says Jim Wingrove, director of agency and sales support for Guelph, Ont.-based Co-operators Group Ltd.

Although account managers focus mainly on investment products, they are an integral tool in the banks’ drive to dominate the full-service marketplace. “They may not be at the same sophistication level as the brokers, but they certainly have a role in relationships,” says Filion.

The bank executives surveyed agree, with the majority citing relationship-building — along with product knowledge — as an account manager’s top attribute.

“We want someone who truly enjoys working with customers, who can help them understand their needs and find solutions,” says Wendy Hannam, executive vice president of domestic personal banking and distribution for Bank of Nova Scotia in Toronto.

Banking products are one such solution, which, while not a cash cow, play a crucial role in driving business to the banks. “They’re a defensive play,” says Filion. “No one is expecting to make a lot of money off them. But if you want to keep your clients, you have to offer them.”

Steve Eccles, vice president of investments for Vancouver-based Vancouver City Savings Credit Union, can attest to that: “Most of our members have tended to invest elsewhere, but once we tell them all that we do here, they tend to be very warm about bringing their business over.”

This arsenal of GICs, high-yield savings accounts and term deposits has left the planning firms playing catch-up. “We are Canada’s only wealth-management firm that owns a Schedule 1 bank,” says Dan Brintnell, executive vice president and co-head of Toronto-based DundeeWealth Inc. ’s retail division. “That obviously widens our product offering.”

Assante is also hoping to add banking products to its menu, according to chairman and CEO Joe Canavan. “Clients are telling us they don’t want five or six relationships,” he says. “They want one trusted, respected advisor.” IE