If the results of this year’s Report Card series serve as any indication, there is more than one way to satisfy advisors when it comes to succession planning. That’s because the firms that were rated best in this category have different methods for helping their advisors in their transition toward retirement.

Although some firms were praised for offering a comprehensive succession arrangement that accommodated the seller of a book of business and had supervisors on hand to help smooth out any bumps, other firms were lauded for giving advisors complete freedom when selling their books.

Furthermore, some advisors cited their firms’ focus on working in teams, which facilitates succession planning by slowly transferring the book to younger advisors, as the reason for their satisfaction.

Advisors with Mississauga, Ont.-based mutual fund dealer PFSL Investments Canada Ltd. were pleased with the firm’s succession program, rating it at 9.5. PFSL advisors must first qualify, based on production, for ownership of their books. Retiring advisors can then sell the book to another advisor within PFSL.

“We have an ownership program that is fantastic,” says a PFSL advisor in Ontario. “You can sell your book of business as well as your overrides and future income.”

Jeff Dumanski, PFSL’s president and chief marketing officer, says the program is not only a great way to keep client assets at the firm, but it also satisfies the demands of advisors who have an eye toward retirement: “There are a lot of sons and daughters who come in and take over [their parents’] books of business. They see the value that PFSL has and that their business is theirs. The incentive of the program is that if you sell it and the new guy can grow it, the original advisor will get a bigger portion of the cash flow coming in.”

Ottawa-based independent mutual fund dealer Independent Planning Group Inc. is another firm that offers a comprehensive succession-planning program that its advisors are very satisfied with. Although IPG’s advisors did not comment much on the program, they rated it at 8.4.

IPG’s succession-planning program, which was launched last year, is flexible and done on a case-by-base basis, taking individual advisors’ needs into account, says Vince Valenti, IPG’s president. He explains that the firm typically brings in lawyers and bankers to help with the process, and that the firm acts as the financing agent for advisors who acquire the books.

“We help the buyer and the seller with the necessary agreements. We help quarterback the agreements and then we ensure that the seller gets paid,” Valenti says. “Typically, [the deal is] structured over several years. There could be a percentage of the purchase price that’s paid up front, and then the balance paid over several years. IPG will be there to collect the commissions from the buyer and use some of those commissions to pay the seller. ”

Although some advisors are thrilled with their firms playing such a key role in succession planning, others want their firms to be more hands-off. Such was the case with advisors at Toronto-based boutique brokerage GMP Private Client LP, which received a rating of 9.4 for its succession-planning program.

The firm gives its advisors complete control over the succession process, in that they can sell their books to co-workers or to advi-sors who are not even with the firm. That’s because GMP has a policy that gives advisors complete ownership of their books, says GMP president and CEO James Werry, noting that this policy is a major part of why advi-sors join — and stay at — GMP.

“I think advisors would see [GMP’s succession program] as competitive, but I think that the overwhelming reason why an advisor would join us is ownership in the business,” Werry says. “We want to have a culture in which people are here for the right reasons and not [because] there’s a penalty if they leave.”

Another reason GMP advisors may be so satisfied with their firm’s succession program is that they work in teams with younger, less experienced advisors to whom they can eventually sell their books.

“Some less experienced advisors join to be a part of a team, and we encourage that,” Werry says. “For certain advisors, a team approach is key for a succession plan. But it’s the advisors’ choice if they want to build a team or have a specialized offering with a traditional setup.”

@page_break@The data obtained for this year’s Brokerage Report Card reveal that GMP advisors are taking advantage of going the team route — 61% of those surveyed report working in a team environment.

This was the first year in which advisors were asked if they worked as part of a team — and the results indicate that those who are part of a team are in favour of it as a succession-planning strategy.

“I’m in a group, and the idea is to arrange a succession plan within the group,” says an advisor in Ontario with Toronto-based RBC Dominion Securities Inc. “That’s one of the reasons why I’m here.”

Toronto-based boutique brokerage Richardson Partners Financial Ltd. , which was rated 8.6 for its succession program, has the highest percentage of advisors who report working in teams, at 73%.

“It’s a good succession plan for the lead advisor on some of those teams,” says Richardson Partners’ president and CEO, Sue Dabarno. “With an average age of 48, you can well imagine we have some advi-sors who are looking to run their careers differently in the future.” IE