The retirement programs for financial advisors that banks and credit unions (CUs) have put in place are critically important to those advisors. And the firms’ efforts praised the most were those that include a lucrative pension plan and a comprehensive suite of retirement savings tools, such as an employee stock-purchase program and extended benefits.

Unlike advisors with brokerages and mutual fund dealers, advisors with deposit-taking institutions are far more dependent upon their firms for their retirement because these advisors don’t sell their books of business to fund their twilight years. That’s why the advisors surveyed for this year’s Report card on Banks and CUs gave the “firm’s succession/retirement program for advisors” an overall average importance rating of 9.1.

So, it’s no surprise that advisors with banks and CUs pay close attention to their firms’ retirement programs and know exactly what they like or dislike about their firms’ pension plans and other important retirement services.

For example, advisors with Toronto-based Canadian Imperial Bank of Commerce (CIBC), who gave their firm the highest rating in the retirement program category, at 8.9, praised their bank’s commitment to maintaining a defined-benefit (DB) pension – especially as this type of pension plan is being phased out across the financial services sector.

“We have one of the best [retirement] programs because we have a defined-benefits pension,” says a CIBC advisor in Ontario.

“We have a very good pension plan,” adds a colleague in the same province. “The longer you work at CIBC, the more [the bank] contributes to it. It’s very clear.”

Generous matching

However, it’s not only advisors who have access to a DB pension plan who praised their firms’ efforts. For example, advisors with St. Catharines, Ont.-based Meridian Credit Union, who contribute a percentage of their salary toward their defined-contribution (DC) pension plan, said the plan works in their favour because the CU offers an attractive matching component.

As a part of Meridian’s DC pension program, that CU contributes up to 7% of an advisor’s annual salary toward his or her pension, with the percentage based on tenure – a move advisors lauded.

“It’s a defined-contribution pension plan. It [includes] a pretty generous match [by the CU] – more so than my previous firm,” says a Meridian advisor in Ontario. “It’s more than fair.”

“The matching of employer participation, as far as contributions go, is very attractive,” a Meridian advisor in Ontario agrees.

But Meridian’s retirement program, which was tied for the second-highest rating in the category with Toronto-based Royal Bank of Canada (RBC) at 8.6, goes beyond generous employer contributions toward the pension plan.

When advisors retire, the CU continues to assist them through a “retirement service award” – a lump sum upon retirement for each year of service, which offsets the costs of health-care expenses.

Furthermore, Meridian is exploring new ways to assist its advisors with the retirement process, introducing a succession program that will facilitate a smoother transition for advisors and clients alike, says Bill Whyte, senior vice president and chief of member services with Meridian in Toronto.

“The retiring advisor who has many years of experience and has a relationship with [clients] can pass that information through the transition to the new advisor, so the member experience is kept whole,” Whyte says.

Worth noting is that Meridian is considering compensating advisors for helping their clients make the transition to a new Meridian advisor, he adds. There is no firm date yet for when this program will be implemented.

Much like Meridian, RBC also helps its advisors prepare for retirement through a DC pension plan and significant other benefits. For example, RBC offers its advisors access to the Invest in Yourself program, which allows employees to talk to RBC experts in human resources and insurance about retirement or to learn retirement tips through online learning modules.

Offering flexibility

As well, RBC has a savings program for which eligible employees who have been with the bank for at least six months can choose to have a portion of their paycheque automatically deducted and put into the savings plan. RBC then matches those employee contributions by 50% (up to plan limits).

RBC advisors can choose to put these savings in a range of investment options and have the opportunity to maximize the tax-effectiveness of those savings by directing some of their investments toward tax-free savings accounts and RRSPs.

“What we heard from advisors is that they wanted more flexibility and more options to invest, so [this] program offers that,” says Michael Walker, vice president and head of branch investments with RBC.

Although some advisors with banks and CUs are very pleased with the mix of pensions and other retirement tools at their disposal, other advisors would like to see their firm make improvements to their retirement programs.

For example, advisors with Edmonton-based Servus Credit Union gave their firm the lowest rating, at 7.6, in the retirement category for a variety of reasons.

The CU offers a group RRSP program in which Servus matches its advisors’ contributions, as well as preferred rates on banking products for retirees. However, some Servus advisors felt their retirement plan is not competitive.

“[There’s a] group RRSP. My husband and I are both in the industry, but [the program] is not up to date,” says a Servus in Alberta.

Meanwhile, a colleague in the same province complained that “a lot more could be done, [such as] communicate what we actually have available.”

Servus does offer its advisors some perks for retirement planning. However, as advisors help their clients plan for retirement on an everyday basis, much of the responsibility for advisors’ retirement planning is left on their own shoulders, says Randy Biberdorf, vice president, wealth management, with Servus.

“There are some additional benefits for our deposit products, including term deposits or [guaranteed investment certificates], such as staff enhancements to those rates. We also waive any RRSP administration fees on employee accounts,” Biberdorf says. “But, in terms of helping [advisors] plan for their retirement, they are retirement planners. So, generally, we do that for our other employees; but, quite often, [advisors] are doing it for themselves.”

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