Although the investment industry’s independent shops often play second fiddle to the bank-owned brokerages in terms of sheer size, the indies continue to outperform their big-bank peers in how well they foster open lines of communication with their advisors and create a positive corporate culture in which advisors can feel comfortable.
Case in point: advisors with the independent firms surveyed for this year’s Brokerage Report Card (except those with Vancouver-based Canaccord Genuity Wealth Management [see below]) gave their firms higher performance ratings in the “firm’s effectiveness in keeping advisors informed,” “firm’s receptiveness to advisor feedback” and “firm’s corporate culture” categories than advisors at the bank-owned brokerages did.
“I could walk into the president’s office and talk for hours,” says an advisor in British Columbia with Vancouver-based regional independent Odlum Brown Ltd. “The whole place is an open door.”
Many advisors with bank-owned dealers said they felt disconnected to top management and that their firm was becoming aligned too much with its big-bank parent in terms of culture and goals. In contrast, many advisors with the independents lauded their firm for promoting accessibility to senior management and for having an inclusive corporate culture.
Toronto-based national independent Richardson GMP Ltd. received top ratings of 9.6 in corporate culture and 9.4 in both receptiveness to advisor feedback and effectiveness in keeping advisors informed. Advisors praised the firm for its leadership, collegial atmosphere and emphasis on open communication.
“We have quarterly meetings with the CEO and we go through the financials,” says a Richardson GMP advisor in Ontario. “My buddies at bank-owned firms don’t have a clue what’s going on with their firms.”
Adds a colleague in Quebec: “That’s why we all joined [Richardson GMP]: the culture. It harkens back to the brokerage firms of previous decades.”
Advisors with Calgary-based regional independent Leede Financial Markets Inc., said their firm’s strong performance in communication and corporate culture is attributable to the fact that executives are working brokers themselves. Says a Leede advisor in B.C.: “Everyone is rowing the boat in the same direction.”
And advisors with Mississauga, Ont.-based national independent Edward Jones gave their firm strong ratings in the communications categories and corporate culture, saying that advisor feedback is encouraged. “I have never felt like I couldn’t give my 2¢,” says an Edward Jones advisor in Ontario, “or that they have never valued my opinion.”
Next: Bank-owned brokerages
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Bank-owned brokerages
In contrast, most of the bank-owned brokerages lagged considerably in these categories. For example, advisors with Toronto-based BMO Nesbitt Burns Inc. gave their firm relatively weak ratings in effectiveness in keeping advisors informed, corporate culture and a category-worst 6.7 in receptiveness to advisor feedback.
“They never listen to the small guy,” says a Nesbitt advisor in Ontario. “Guys in head office feel they’re smarter, that they know our jobs better than we do.”
Nesbitt’s management, for its part, said that the firm’s advisory council, consisting of 16 advisors, helps executives stay in close contact to the advisory network. “[It’s] an important forum,” says Geoff Newton, managing director and senior vice president with Nesbitt, “for both listening to the concerns of our advisors [and] gathering their important input on the firm’s strategic initiatives.”
Advisors with Toronto-based TD Wealth Private Investment Advice (TD Wealth PIA) also said that they feel disconnected from management, that they’re rarely consulted on changes and that their feedback is unwanted. “It’s top-down driven,” says a TD Wealth PIA advisor in B.C. “We don’t hear about [a change] until it’s in place.”
Dave Kelly, the firm’s president and national sales manager, says TD Wealth PIA has made improving advisor communication a priority, launching several initiatives to address the issue, including engaging with advisors about the firm’s business strategy. “We’ll get a fundamental shift in the culture,” he says, “in a very positive way.”
Despite the overall differences between independent investment dealers and their bank-owned counterparts, two firms bucked the trend.
Advisors with Toronto-based RBC Dominion Securities Inc. (DS) gave their firm solid ratings in receptiveness to advisor feedback (8.0) and corporate culture (8.9), both top scores among the bank-owned brokerages. “It’s a conservative culture,” says a DS advisor on the Prairies, “with a very good reputation.”
At Canaccord, the lingering frustration over the firm’s instability during the past few years, coupled with changes in management, is reflected in low ratings for receptiveness to advisor feedback (6.9) and corporate culture (6.9). Says a Canaccord advisor in Ontario: “The firm’s single biggest failing has been communication.”
Stuart Raftus, who took over as Canaccord’s president in January, is focusing on improving communication: “I’m committed to be on the road every second week, out into the [branch] system.”
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