Dealer firms may be neglecting some of the categories that matter most to financial advisors while outperforming in the ones that are less critical to their reps, according to the results of this year’s Dealers’ Report Card.
Investment Executive asked advisors surveyed for the Report Card to rate their firms’ performance in various categories and how important they consider each category to be to their individual businesses. An average importance rating that is higher than the average performance rating reveals that advisors’ expectations aren’t being met in that category; an average performance rating that is higher than the average importance rating reveals advisors’ expectations are being exceeded.
Advisors identify “client account statements,” “back office and administrative support,” “support for developing a financial plan for clients” and “technology tools and advisor desktop” as the categories that are left wanting the most.
In the back-office category, advisors complain of an abundance of paperwork and of staff being inaccessible, unorganized and poorly trained. An efficient back office is critical, advisors say, in making transactions seamless for clients.
Says an advisor in Manitoba with Richmond Hill, Ont.-basedGlobal Maxfin Investment Inc. ‘s Professional Investment Services (Canada) Inc. subsidiary: “I’ve had clients who are friends of mine who fired me because of their paperwork processing time.”
Firms could improve their efforts in this area by investing in training their back office staff. Says an advisor in Ontario with Toronto-based DundeeWealth Inc. : “They’re not experienced. The staff don’t understand the sales part of the equation.”
Firms also struggle to meet advisors’ expectations regarding the client account statements. Advisors say it’s critical for statements to be clear and straightforward so clients can understand how their portfolios are performing.
Otherwise, advisors face numerous calls every quarter from clients seeking clarification. “The phone rings off the hook,” says an advisor in Alberta with Calgary-based Portfolio Strategies Corp. “It’s just a poorly laid-out statement.”
Thus, advisors urge firms to design statements that more clearly show the client’s gains or losses.
Support for developing a financial plan for clients is another essential area in which firms are not meeting advisors’ expectations.
“It’s very important I have software that works,” says an advisor in Ontario with Mississauga, Ont.-based Investment Planning Counsel, “because I build my practice on financial planning.”
Firms earned an average rating of just 6.9 in the category while the importance rating increased to 8.1 from 7.4 last year. Some advisors say they receive little support in this area — or the support is limited to high net-worth clients; other advisors say the available financial planning software is weak.
Technology is also vital to advisors. Explains an advisor in Ontario with Burlington, Ont.-based Man-ulife Securities: “Making use of technology isn’t about striving to get a competitive advantage — it’s just crucial in this business.”
On average, advisors rated their firms at 7.6 in the category, with many advisors complaining of outdated technology. “The whole system is antiquated, it needs to be upgraded,” says another Manulife advisor in Ontario. “To work most effectively, I need the most efficient systems.”
Meanwhile, firms exceeded advisors’ expectations in some categories that reps consider less vital. For instance, many advisors say their “firm’s diversity and inclusion strategy” doesn’t impact their businesses in any way. Still, they’re impressed by their firms’ initiatives in this area. “A lot of key people in head office are women,” says an advisor in Ontario with Ottawa-based Independent Planning Group Inc. “You want to work for a company that’s inclusive.”
Firms are also surpassing advisors’ expectations in “support for tax planning” and “support for insurance planning.” Those advisors who require support in these areas praise their firms’ offerings.
“If you do complete planning,” says an advisor in Ontario with Winnipeg-based Investors Group Inc., “everything is there.” IE