Special Feature

Advisors’ Report Card 2015

Although advisors are continuing to see significant growth in their books of business, their practices are undergoing a seismic transformation as a result of CRM2. All the insight, the ratings and the candid comments from the September 2015 issue of Investment Executive.

A significant percentage of advisors recommended their firm, but a close look reveals that this usually comes with stipulations

By Fiona Collie | September 2015

When the financial advisors surveyed for Investment Executive's 2015 Report Card series were asked if they would recommend their firm to another advisor, the answer was a resounding yes. However, advisors typically were quick to add a caveat: potential recruits must meet certain criteria if they plan on making it at that firm.

Of the 1,548 advisors surveyed for this year's Report Card series, 93.7% said they would recommend their firm to another advisor. Advisors offered a variety of reasons for their recommendation, including independence, good product selection, equitable compensation and a strong compliance regime, as well as support services and tools that help advisors do a good job.

"[National Bank Financial Ltd.] gives you flexibility, the [compensation] grid is fair and easy to understand, and the equities research is good," says an advisor in Ontario with the Montreal-based firm. "They let you run your practice like a boutique, but with the backing of a 100-year-old institution."

Another important factor advisors considered before recommending their firm is their company's overall work environment. Advisors who have a good rapport with colleagues and management and feel their office has a positive culture were more likely to recommend their firms.

"We have a great atmosphere," says an advisor in Ontario with Toronto-based Canadian Imperial Bank of Commerce. "I'm very happy to come to work."

Yet, these recommendations often came with stipulations. Case in point: almost all the advisors with Winnipeg-based Investors Group Inc. who were surveyed said they would recommend their firm because of its corporate culture and ongoing training. But many advisors also made it clear that the firm is a better place for rookies to join than for investment industry veterans.

"Our firm really doesn't hire experienced advisors. But, for rookies, the training is good," says an Investors Group advisor in Ontario.

Conversely, advisors with Toronto-based Raymond James Ltd. praised its independent culture and strong compliance regime, then added that only experienced brokers should think of joining the firm. Says a Raymond James advisor in Ontario: "I wouldn't recommend Raymond James to a younger advisor. It's too hard to build your business here."

Occasionally, some advisors said they would recommend their firm simply because they don't see much of a difference among similar shops.

Says an advisor on the Prairies with Oakville, Ont.-based Manulife Securities: "The grass isn't always greener elsewhere."

Not every advisor was willing to give even a tepid recommendation to their firm, however. For example, although 86% of advisors with London, Ont.-based Freedom 55 Financial said they would recommend their firm, that's a far cry from last year, when 97.9% of Freedom 55 advisors said they would recommend their firm.

Freedom 55 advisors were less enthusiastic this year because of issues associated with the rollout of the New Business Now application process.

"People are leaving the business because they can't get products issued. The life insurance side is killing people," says a Freedom 55 advisor in Ontario. "There are far worse places to be, for sure, but I'd feel guilty if someone was leaving another firm and I recommended they come here."

Similarly, 78.6% of advisors with Toronto-based TD Wealth Private Investment Advice (TD Wealth PIA) recommended their firm, the lowest percentage among the 40 firms in this year's Report Card series.

A TD Wealth PIA advisor in Alberta said he would not recommend the firm because he believes it offers advisors less value or, at best, the same value as other brokerages.

"I wouldn't feel comfortable recommending the firm," adds a colleague in Ontario, "because I don't know there's anything we do differently from other firms."

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