Canada's Big Six banks are often viewed as a monolith — a largely homogenous force that dominates the Canadian financial services sector. Yet, the data obtained for Investment Executive's 2017 Report Card on Banks indicate that the banks' branch-based investment businesses are far from identical.
In fact, the results of this year's Report Card reveal that the banks appear to be taking different approaches to this segment of their retail financial services business. Drilling into the data for each bank reveals a wide gap in the size of the books that branch-based financial advisors are running, their productivity levels and the compensation they're receiving.
At some banks, branch-based advisors resemble full-service advisors at brokerages and dealers; at others, they appear to be positioned much closer to traditional frontline retail bankers. These differences in approach, coupled with data that can be particularly volatile because of relatively small sample sizes, suggests that there's a wide range of variation in the banks' investment businesses.
Big differences among banks’ advisorsSlideshow
Bank of Montreal
BMO has one of the youngest branch-based sales forces in the survey, with an average age of 39.4 years old. That said, advisors’ average age and average industry tenure is up by about two years from 2016, indicating that this year’s survey is capturing a slightly older sample. In addition, their reported compensation is skewing higher as well, with only 25.7% of BMO advisors earning less than $100,000 annually according to this year’s survey, down from 46.9% last year.
Bank of Nova Scotia
Scotiabank advisors appear to be operating in a much different environment than most of the other big banks. They report notably smaller books in terms of average assets under management (AUM); yet, their client rosters are also much larger than those of their counterparts at the other banks. As a result, their average productivity, as measured by AUM/client household, is notably lower as well while their compensation is particularly skewed toward the lower end, with 95.5% reporting that they earn less than $100,000.
Canadian Imperial Bank of Commerce
CIBC advisors report some of the largest books on the Street as their average assets under management are $138.9 million, which is more or less unchanged from last year. At the same time, CIBC advisors report lower client numbers than they did a year ago. As a result, their productivity is up, indicating that these advisors are focusing increasingly on their larger clients.
National Bank of Canada
This year’s survey appears to be capturing an older, more experienced segment of National Bank’s retail sales force as average age and industry experience are both up year over year. Yet, at the same time, average assets under management, client numbers and productivity are all down from 2016.
Royal Bank of Canada
RBC appears to have one of the older, more experienced, higher-end sales forces on the Street. The average RBC advisor is 45.3 years old, with 20.8 years of experience in the business. With average assets under management (AUM) at $117.3 million and AUM/client household averaging $533,512, RBC advisors are also running some of the banking channel’s biggest, most productive books. They are also rewarded for their bigger books as 78.9% of RBC advisors are earning in excess of $100,000 a year.
Advisors with TD Wealth Financial Planning, a division of TD Bank, report significant growth in their books, with average assets under management rising to $84.8 million from $59.5 million in 2016. Some of the increase may reflect differences in the sample, as the TD advisors surveyed were notably older and more experienced, on average, compared with last year. They also are among the best-paid advisors on the Street, with 39.4% of TD advisors reporting that they earn in excess of $250,000 annually.
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