The firms in investment Executive’s 2013 Report Card series with which financial advisors are most satisfied are unique from each other. The firms don’t operate in the same channel within the financial services industry, and each employs a different business model. What ties them together, though, is that they give advisors what they want: the independence to build their businesses as they wish.
This independence includes having the freedom to make objective product choices for clients; a comprehensive product offering that makes those choices possible; and the stability that gives advisors confidence in serving their clients to their best ability.
To find these top-scoring firms, IE averaged the “IE rating” (which represents the average ratings for all categories for each firm) and the “overall rating by advisors” (the rating out of 10 that advisors gave their firm as a whole) for each of the 44 firms in this year’s Report Card series.
The result is that nine firms had an average rating of 9.0 or higher: Mississauga, Ont.-based PFSL Investments Canada Ltd. (9.8); Toronto-based PPI Advisory and Richardson GMP Ltd. (both 9.2); Mississauga-based IDC Worldsource Insurance Network Inc. (IDC WIN; 9.1); Calgary-based PPI Solutions Inc. and Leede Financial Markets Inc. (both 9.0); as well as Toronto-based Royal Bank of Canada, RBC Dominion Securities Inc. (DS) and World Financial Group Insurance Agency of Canada Inc. (all of which garnered a 9.0).
When advisors working at these firms were asked to provide the most positive aspects of working at their firm, they said it’s the freedom they have to build their businesses.
For a Richardson GMP advisor on the Prairies, the independence his firm allows him in running his business as he sees fit is a sign of confidence in his abilities: “They trust you to do your job. After they give you the tools, they don’t stand over you. They walk the walk on letting you be an entrepreneur; they don’t just talk the talk.”
Andrew Marsh, Richardson GMP’s president and CEO, says this policy is a conscious effort: “We like to say we’re a firm for advisors who want to be independent, but they don’t want to do it alone. So, the autonomy that we give advisors to run their businesses as they see fit is something we work very hard on.”
This independence extends to advisors’ freedom to make objective product choices for their clients. Just as in the 2012 Report Card series, the firms that were rated highly overall also did very well in this specific category. This is especially relevant, given that all advisors surveyed gave this category the second-highest importance ratings, at 9.5, behind “firm’s ethics,” which received an importance score of 9.6.
“I am very independent,” says an IDC WIN advisor from Ontario. “I look down on career-type shops that shove products down your throat. We’re given free room to choose products, and [the firm has] a wide table of products.”
Although some advisors with independent firms said their peers at the banks or with bank-owned brokerages are constrained by proprietary products, a DS advisor in Ontario said that relying on in-house products is unrealistic in this competitive climate.
“This is something independents like to lean on to bash the banks, but it couldn’t be further from the truth,” he says. “It’s all about having the right product for the right client. You can’t compete in this day and age if you push only in-house products.”
David Agnew, DS’s CEO and national director, says DS considers it important that advisors have the independence to choose the products that best suit their clients’ needs: “They determine what’s appropriate for their clients. So, we make sure we’re able to offer all of the best products available to meet the independent needs of their clients, regardless of the manufacturer.”
Having these “best” products on the shelf is another area in which these nine firms excelled; their advisors praised the variety and strength of the products they can access. PFSL advisors, for example, gave their firm a 9.7 rating in the “quality of firm’s product offering” category because the firm provides tried-and-true products. Says a PFSL advisor in Ontario: “We don’t always go for the flavour of the month, like some other firms [do].”
“Currently, we are scouring the marketplace to understand what’s out there and what has longevity,” says Jeff Dumanski, PFSL’s president and chief marketing officer, about the process involved for choosing PFSL’s product shelf. “Will our clients understand it? Will it be good for them? Will it be lucrative for the rep to sell those products? And does it work for the back office?”
Another category in which all nine firms received a high rating was for “firm’s stability,” which also received the third-highest important score, at 9.4. Says a DS advisor in Atlantic Canada: “I’ve never had to worry about working for [DS] or about clients’ assets.”
Advisors tended to attribute company stability to leaders who manage well and ensure not only the firm’s financial well-being but that the firm continues to evolve in an industry that’s always changing. Says a Leede advisor in British Columbia: “As a shareholder, I know the financial situation. And even through the rough markets, the company is well run.”
Adds a PFSL advisor in Ontario: “Our leadership is amazing. They wouldn’t have gotten to where they are if they weren’t good, knowledgeable and forward-looking.
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