Financial planning, which has long been a hallmark of the mutual fund dealer channel, is becoming more important to advisors. This is primarily because financial planning will help them show their clients the value of the financial advice that advisors provide, now that the second phase of the client relationship model (CRM2) is coming into effect.

However, many advisors surveyed for this year’s Dealers’ Report Card said their firms have plenty of work to do to meet the increasing need for support in creating financial plans for clients.

This is especially important because CRM2 will require dealer firms and advisors to disclose costs and performance fully to their clients. (See story on page C13.) Thus, financial planning, as well as the related wealth-management support services that go along with it, will help advisors justify costs to their clients and dispel the perception that advisors are just mutual fund salespeople.

“When we start disclosing fees, wealth-management services will become more important,” says an advisor in Atlantic Canada with Toronto-based Assante Wealth Management (Canada) Ltd. “It will be important for clients to see that you’re creating value.”

Case in point: advisors gave the “support for developing a financial planning for clients” category an overall average importance rating of 7.9, up significantly from 7.2 in 2014. In contrast, three of the seven firms that offer such support saw their ratings drop by half a point or more from 2014 as the overall average performance dropped to 6.9 from 7.4 year-over-year. In turn, a comparison of the two overall average ratings results in a “satisfaction gap” of a full point – which is tied for fourth place among all the categories in this year’s Report Card.

The reasons for this are clear: advisors who rated their firm lower in financial planning this year expressed frustration with financial planning software that is too expensive to purchase or either too simple or too detailed and not user-friendly. Advisors also were confused about what exactly their firms offer in terms of financial planning support.

“I don’t use my firm’s financial planning platform because we tried it a few years ago and found it to be cumbersome and not competitive,” says an advisor in British Columbia with Toronto-based HollisWealth Inc.

“We have to buy our own software. They offer it, but we have to pay for it. How is that support? It’s garbage,” says an advisor in Ontario with Oakville, Ont.-based Manulife Securities.

Meanwhile, Lévis, Que.-based Desjardins Financial Security Independent Network’s financial planning rating dropped to 5.8 from 6.7 last year. There appears to be much confusion among Desjardins advisors about what support is available.

“I don’t think they have any tools. I primarily use third-party software,” says a Desjardins advisor in Ontario.

However, a colleague in B.C. says: “You can call head office and have a specialist draw up a financial plan for you, which is helpful.”

Nancy Schafer, Desjardins’ regional vice president, sales and distribution, for Western Canada, says the firm is aware it needs to inform its advisors better about the financial planning support available. “What we were finding is a lot of people don’t know how much we offer,” she says, “and so few of our tools are used. It’s really disappointing, [given] how much we invest in it.”

As a result, Desjardins has created a marketing package for its offerings that was distributed to advisors early this year, she adds. Further efforts designed to “leverage” Desjardins’ wealth-management platform in the wake of CRM2 are in the works.

In contrast, advisors with Winnipeg-based Investors Group Inc. (9.3) and Assante (7.8) rated their firms’ financial planning support only marginally lower than last year because of their comprehensive and user-friendly financial planning software, as well as departments of professionals that advisors can rely on.

Says an Investors Group advisor in Ontario about that firm’s financial planning software: “We have a really good program. It’s detailed, it goes through net worth, analyzes insurance and leads to more meaningful conversations with clients.”

Adds a colleague in the same province about the firm’s financial planning support specialists: “People can call in to head office and to the advanced financial planning department. We have lawyers and accountants who are very good and knowledgeable.”

Investors Group dedicates significant resources to financial planning support because that’s where the “true value” is delivered, says Todd Asman, senior vice president of products and financial planning: “To do that, we need to provide excellent tools that continue to evolve and mature – and we’re not going to stop investing in that.”

Even though Assante saw its support for financial planning rating drop slightly to 7.8 from 8.0 year-over-year, that firm’s advisors still were pleased with the firm’s team of professionals – including lawyers, accountants and financial analysts – to whom they have access.

“The firm helps me focus on the relationships and gives me a second opinion on my financial plans. The plans we can put together are complex,” says an Assante advisor in Alberta.

Adds an Assante advisor in Ontario: “Assante has a department that will do financial plans for us if we provide them with the data. That’s awesome because it takes the task off my plate so I can focus on other things, such as getting new clients in the door.”

Although Assante advisors praised this support, the firm soon will be expanding its offerings to include a web-based financial planning application that will integrate with the firm’s existing systems, says Jaime Ross, Assante’s senior vice president, wealth and estate planning: “We’re trying to empower our advisors to have more choice and flexibility in how they can engage with their clients.”

Calgary-based Portfolio Strategies Corp. recently introduced such support with a reduced price on Montreal-based EquiSoft’s WealthElements software – and advisors were happy with this decision.

“I had been looking at financial planning software, and [WealthElements] is the platform I had wanted to use anyway, so I’m happy,” says a Portfolio Strategies advisor in Alberta. “I’ll be offering financial planning more now.”

The introduction of the support stemmed from an internal survey conducted last summer, says Ken Parker, Portfolio Strategies’ chief financial officer and chief compliance officer: “It was in response to the CRM2 changes coming in and advisors needing to show their value proposition to clients. [The support] still is optional, but if we can enhance the opportunity for [advisors], we’ll take every chance we can.”

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