After nursing clients through a difficult recovery, financial advisors in Canada’s brokerage sector finally are reporting healthy growth in their assets under management (AUM), in their take-home pay and in their satisfaction levels with their firms in Investment Executive‘s (IE) 2013 Brokerage Report Card.

All of this growth is evident in the numbers. Advisors saw a hefty increase in AUM, reporting the largest overall average book of business to date in this Report Card, at $92.7 million vs $84.9 million last year. The client asset range of $1 million or more also is on the rise, consisting of 28% of advisors’ books vs 23% last year. These increases also resulted in thicker wallets, as 66.9% of advisors, overall, report that they are earning more than $250,000 compared with 61.1% in 2012. (See stories on pages C6 and C14.)

The overall theme reported by advisors surveyed this year is that they are no longer in a state of recovery but are in “full growth” mode.

 

Says an advisor in Ontario with Mississauga, Ont.-based Edward Jones: “We have a very clear vision for 2020 that is based on three pillars [of growth]: the number of advisors, AUM and the number of client households that will be diversely served.”

 

Advisors at three bank-owned brokerages also are happy with the direction in which their firms are going this year, with high scores popping up in a variety of categories. Toronto-based RBC Dominion Securities Inc. (DS), for example, saw its ratings increase by half a point or more in 17 of the 38 categories – as well as in the “IE rating,” which represents the average of all the ratings for each firm; and in the “overall rating by advisors,” which is how advisors rated their firm out of 10, on average.

As a result, not only does DS continue to have the highest IE rating among all the bank-owned dealers, it now has the second-highest IE rating overall vs ranking fourth overall in 2012. In part, it’s because DS continues to exceed its advisors’ expectations in “firm’s stability” and “firm’s strategic focus,” with many DS advisors praising their firm for its strong leadership and brand recognition.

“I’ve been offered many jobs,” says a DS advisor in Quebec, “but I’m never going to leave Holt Renfrew to go to Wal-Mart.”

Toronto-based bank-owned brokerages ScotiaMcLeod Inc. and TD Wealth Private Investment Advice (TD Wealth PIA) also saw their ratings increase by half a point or more in a variety of categories, as well as their IE rating and overall rating by advisors. Both firms made up ground year-over-year, having experienced significant slips last year.

ScotiaMcLeod saw its ratings increase in an impressive 30 categories, including “firm’s delivery on promises made” and “firm’s corporate culture”; however, the firm had a lot of ground to make up after seeing its ratings plummet by the same margin in 22 categories in 2012, as well as the IE rating and overall rating by advisors.

“The firm is finally figuring out where it wants to go,” says a ScotiaMcLeod advisor in Ontario. “It’s actually listening now. We can speak up and be heard.”

As for TD Wealth PIA, it saw its ratings increase in 34 categories, with 18 being improvements of half a point or more. This firm has spent the past year making major improvements to the areas in which its advisors had previously voiced concerns.

“[The firm] deserves full marks for identifying where it had failed before,” says a TD Wealth PIA advisor in Ontario. “A lot of attention has been put to where you can actually see the improvements. Last year, I said, ‘I will believe it when I see it.’ And, now, I can see the result of their efforts.”

The increased satisfaction may stem in part from firm’s recent rebranding initiative in which the “TD Waterhouse” name is changing to “TD Wealth” across all platforms. The firm began this process in January and will continue to ramp it up over the next 12 to 14 months.

“I’m looking forward to great improvements this year if they follow through,” says a TD Wealth PIA advisor in Ontario. “The ‘TD Wealth’ name can only bring good things.”

Other firms weren’t as lucky. Montreal-based National Bank Financial Ltd. (NBF), for example, saw its ratings plunge by half a point or more in 13 categories, as well as in the overall rating by advisors; while Vancouver-based Canaccord Wealth Management saw the same margin of decline in 15 categories.

Many Canaccord advisors expressed concern about their firm’s stability and strategic focus after 16 of its branches were closed at the end of 2012. But Tanya Bird McCann, Canaccord’s chief operating officer, says the closures were necessary in order for the firm to realign its growth strategy: “Going through that exercise, we are able to concentrate even more of our efforts on the advisors that are aligned with our strategy and going after mass affluent and high net-worth clients.” (See story on page C5.)

Regardless of whether advisors feel happier or not with their individual firms, one thing remains consistent year-over-year: what advisors value most. “Firm’s ethics,” “freedom to make objective product choices” and firm’s stability continue to have the three highest overall average importance ratings.

“It is very important to me to have complete freedom,” says an advisor in Ontario with Toronto-based Macquarie Private Wealth Inc. “And that means having an unbiased, open platform for products.”

Adds an NBF advisor in Manitoba: “A firm’s ethics should be the most important thing to look at in a firm. Otherwise, you should be walking out the door.”

Another category that received high importance ratings is a new one added to this year’s Report Card: “your sales assistant.” Advisors were asked to rate the performance and importance of their sales assistants to their businesses – and it’s no surprise that advisors overall rated them at 9.0 in performance and at 9.3 in importance. Advisors spoke of their assistants as being invaluable parts of their businesses and being key points of contact for their clients.

Vancouver-based Odlum Brown Ltd. and Toronto-based Richardson GMP Ltd. both had top performance ratings of 9.5 in this new category. Odlum Brown, for its part, provides all advisors with a sales assistant who is both hired and trained by the firm directly. Says Debra Hewson, the firm’s president and CEO: “We see [assistants] as a big part of the team. In fact, a number of sales assistant have gone on to become senior advisors at the firm, so we view them not just as a support people but as a critical members of the team.” (See page C13.)

In addition to sharing the top rating in this category, Richardson GMP continues to see strong ratings across the board. Advisors once again praise the firm for its robust support services as well as the chance to hold equity in the dealer.

“I doubled my book of business and revenue in three years,” says Richardson GMP advisor in Alberta. “And it’s not because I’m doing anything different; it’s just that I have more support around me.”

© 2013 Investment Executive. All rights reserved.