Special Feature

2013 Report Card on Banks & CUs

What do advisors have to say about their firms? All the insight, the ratings and the candid comments from the July 2013 issue of Investment Executive newspaper. Click here to download and view the main chart.

Firms are failing to live up to their advisors' expectations regarding the back office. Most issues are related to the staff

By Jeff Wimbush | July 2013

Many of the financial advisors surveyed for this year's Report Card on Banks and Credit Unions feel that their back-office departments have become more of an obstacle to getting business done than a reliable source of support.

This is evident in the ratings advisors gave their firms in the "back office and administrative support" category. Overall, advisors rated their firms' performance at 7.3 in the category, one of the lowest ratings given overall to the categories in the Report Card. More telling, though, is that advisors rated the importance of the back office at 9.0. The difference between these two ratings, known as the "satisfaction gap," was a survey-high 1.7 points.

Advisors throughout the survey pointed to numerous issues with their back-office support. Among the common themes were that the departments are overworked, rely on outdated technology and the staff lack experience.

Advisors said these issues stem mostly from cutbacks to the back office as management looks for ways to reduce costs. As a result, advisors are taking on more of the paperwork themselves, which is not an efficient use of their time.

"They've cut back," says an advisor in Atlantic Canada with Toronto-based Bank of Nova Scotia. "[The back office is] always short-handed. So, whenever I can, I bypass the back office. I don't like to rely on them."

Adds an advisor in Ontario with Toronto-based Canadian Imperial Bank of Commerce (CIBC): "My back office creates more work for me."

Reducing paperwork

Management, for its part, wants to reduce the amount of paperwork that advisors handle.

Says Larry Tomei, senior vice president, national sales and service, retail and business banking, with CIBC: "We want to remove as much paper and non-client-facing work as much as we can so our advisors can spend time deepening relationships with our clients."

To accomplish that, CIBC created a dedicated team dubbed the "business support and strategic initiative group" within the past two years to focus on shortening turnaround times and finding digital solutions to reduce paperwork. That back-office support, Tomei adds, will continue to improve, given that this group's work will be continuing.

Despite such ongoing efforts, advisors said one reason they're handling more of the paperwork themselves is because the back office is overworked. Thus, advisors suggested that hiring more people for the back office would be a good start toward solving these issues.

"Sometimes, they are very busy and don't have enough time to get everything done," says an advisor in Quebec with Montreal-based National Bank of Canada.

Adds an advisor in the Prairies with Toronto-based Royal Bank of Canada: "They need to put more money into administrative assistance."

But it's not just enough if firms hire more staff; advisors said their firms will have to put greater emphasis on hiring more experienced staff. In particular, because of the high rate of staff turnover in the back office, advisors end up dealing with new employees who are inconsistent and make many mistakes.

"We have a ton of turnover in the back office," says an advisor in Alberta with Toronto-based TD Canada Trust. "I'll call and get a different answer every time."

Adds an advisor in Ontario with St. Catharines, Ont.-based Meridian Credit Union: "There is quite a bit of turnover in staff. It's about getting people in there that know what they're doing all of the time. They need more skills."

Firms look at turnover

To tackle these issues, staff turnover rates are being monitored closely at Meridian. "You'll always worry or be concerned about turnover [in the back office]," says Bill Whyte, senior vice president and chief of member services with Meridian in Toronto. "We stay on top of it because it's very important that those relationships are there, that people know who they can talk to and get things resolved."

Similarly, National Bank is tracking when different departments reach their capacity, says Annamaria Testani, vice president, national sales, intermediary business solutions. So, instead of hiring new, inexperienced people, she says, the bank draws on "a pool of talent that we really train - and we actually move talent along the way."

Another staff-related issue that firms should focus on is the professionalism of the back-office staff, said several advisors surveyed for the Report Card. These advisors pointed to the lack of accountability and unhelpful attitudes among administrative staff, which contribute to delays in processing.

"It's terrible. They're pretty idiotic," says a Meridian advisor in Ontario. "Everything is a fight to get things done. And they don't realize they're the administrative support, not the drivers [of the business]."

Adds a TD advisor in Ontario: "The back office doesn't take responsibility for mistakes and it's very time-consuming to get things fixed."

John Tracy, senior vice president, retail savings and investment, with TD, says the bank is aware of these problems and will continue to work on addressing these issues. He noted that the firm is "constantly looking at how we can improve. If there are places where it's a bit onerous, we want to make it easier. If there is complexity, we want to make it simpler."IE

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