Shifting fortunes for four firms

Financial advisors at three firms who were surveyed for this year’s Dealers’ Report Card were much more pleased with their companies. These advisors gave their firms significantly improved performance ratings in many key categories.

At the same time, advisors with one firm in the survey gave their dealer much lower performance ratings after it experienced significant difficulties in integrating a firm acquired last year.

Oakville, Ont.-based Manulife Securities received significantly higher ratings – defined as a half a point or more – in 13 of the 26 categories in which advisors rated the firm, posting the most such increases for a firm in the survey. As a result, Manulife Securities’ IE rating, which represents the average of all ratings the firm received in the Report Card, rose to 8.1 from 7.4 last year.

Manulife Securities advisors gave their firm strongly improved performance ratings in categories such as “effectiveness in keeping advisors informed,” “firm’s receptiveness to advisor feedback” and “firm’s delivery on promises,” giving management good reviews for its commitment to communicating with advisors.

“[Management] is out talking to the teams regularly and giving us the opportunity to bounce ideas off them and clarify the direction of the firm,” says a Manulife Securities advisor in Ontario.

Manulife Securities holds a large national education forum, as well as regional events, for advisors on a regular basis. In addition, the firm publishes weekly newsletters, as well as a magazine three times a year. The dealer also holds teleconferences and advisory council meetings.

“With the speed with which the industry is evolving,” says George Garner, head of national sales with Manulife Securities. “It’s more important today than it has ever been to understand what’s going on in advisors’ practices.”

In addition, advisors with Manulife Securities gave their firm a performance rating of 7.2 in the “technology tools and advisor desktop” category, up from 6.1 last year, and a performance rating of rating of 7.2 in the “support for using social media” category, up from 5.3 in 2015. Manulife Securities launched a social media program for advisors last year, and about 120 advisors have joined the program so far, Garner says.

Manulife Securities advisors also gave their firm a performance rating of 7.8 in the “products and support for high net-worth clients” category, up from 7.1 last year. During this past year, the firm revamped its separately managed accounts program, introducing new portfolio managers, mandates and fee schedules, Garner says.

As well, the firm soon will launch a discretionary money-management platform that will allow advisors to operate as portfolio managers, he adds: “We have a long queue of advisors who are looking to migrate their businesses onto that platform.”

Advisors with Toronto-based HollisWealth Inc., a full-service dealer owned by Toronto-based Bank of Nova Scotia, gave their firm significantly improved ratings in five of the 31 categories for which it was rated. In turn, the firm’s IE rating rose to 8.0 from 7.5 last year.

Specifically, HollisWealth received significantly improved performance ratings in the “support for tax planning” and “support for developing an investment plan for clients” categories, among others.

“We have access to all [Scotiabank’s] research,” says a HollisWealth advisor in Ontario. “We have all the bank’s resources while maintaining our independence.”

HollisWealth advisors also gave their firm a significantly improved performance rating in “firm’s reputation with clients and/or prospective clients.” Many advisors said Scotiabank’s ownership has been a plus for the dealer, especially in client recognition and comfort.

“The clients look to the name and they see Scotiabank as being a good, solid brand,” says a HollisWealth advisor in British Columbia. “We weren’t as well known when we were DundeeWealth. The brand recognition has gone up.”

The third firm that had good fortune in this year’s Report Card was Richmond Hill, Ont.-based Global Maxfin Investments Inc., whose performance ratings improved significantly in 10 of 20 categories in which the firm was rated. As well, the firm’s overall IE rating rose to 7.7, up from 7.2 last year and the fourth consecutive year in which this rating has improved.

Global Maxfin advisors gave their firm significantly improved performance ratings – even though they were still below the category averages among all firms – in “firm’s stability,” reputation with clients and/or prospective clients and “firm’s corporate culture.”

“We’re very small here,” says a Global Maxfin advisor on the Prairies. “There’s a good relationship among advisors, head office personnel and the audit people.”

The firm also received significantly improved performance ratings in the “technology tools and advisor desktop,” and “back office and administrative support.”

“You have a dedicated person who works with advisors,” says a Global Maxfin advisor in Quebec. “The back office’s manager is accessible. It runs like a charm.”

In contrast, Windsor, Ont.-based Sterling Mutuals Inc. received significantly lower performance ratings in 10 of the 23 categories in which advisors rated the firm, including back office, effectiveness in keeping advisors informed and receptiveness to advisor feedback. As a result, the firm’s IE rating dropped to 7.7 from 8.2 year-over-year.

Much of the discontent at Sterling Mutuals can be attributed to the difficulties the firm has experienced in integrating more than 150 advisors inherited from Armstrong & Quaile Associates Inc. (A&Q, acquired last year).

“[Sterling Mutuals] is going through growing pains with the merger, and it’s harder to reach a live body [in the back office] than it should be,” says a Sterling Mutuals advisor in Ontario.

Nelson Cheng, president and CEO of Sterling Mutuals, readily admits that the firm stubbed its toe in integrating the A&Q advisors: “We could have done a better job with training new guys, but we did not, unfortunately.”

Furthermore, an unanticipated spike in trading volume this past RRSP season – three times the typical volume – contributed to delays and glitches, Cheng adds. In addition, the firm’s ambitious expansion project affected management’s ability to communicate with all of its advisors effectively.

To address these issues, the firm is taking several steps, Cheng says, including hiring more staff, introducing a secure messaging system on the firm’s back-office platform and launching an internal newsletter, among other initiatives.