Firms of all stripes institute rewards and recognition programs to motivate their financial advisors to achieve new heights. Yet, the results of this year’s Report Card Series suggests that advisors aren’t too concerned with or driven by extra perks. In fact, many advisors simply have lost interest in chasing rewards because they’re becoming out of reach more and more.
The “firm’s rewards/recognition program” category was separated from the “firm’s total compensation” category in the Insurance Advisors’ Report Card in 2012. This year, that practice was instituted for the remaining advisor-based Report Cards. Surprisingly, though, the rewards and recognition category received the second-lowest overall average importance rating, at 6.7. In contrast, the total compensation category received an overall average importance rating of 9.0 – and some advisors complained that rewards and recognition are poor substitutes for better pay.
“I’m not overly impressed with the [rewards and recognition] program and it’s meaningless to me,” says an advisor in Ontario with Toronto-based Assante Wealth Management (Canada) Ltd. “I can’t take a pat on the back to the grocery store. Our industry doesn’t understand this.”
Another reason why many advisors don’t care too much for rewards or pay much attention to them: they’re aimed toward only the elite, top-producing advisors – and those advisors who have less experience said there’s nothing worth striving for.
“They don’t reward newer people well,” says an advisor in Alberta with Toronto-based TD Wealth Private Investment Advice. “We’re grouped in too quickly with the big boys and I’m competing against people bringing in $100 million.”
Another point of contention among advisors is that certain teams receive an unfair advantage because they’re able to hit a higher production level. Thus, many individual advisors feel they are being ignored.
“Some teams shouldn’t be recognized; we should be recognizing individuals instead,” says an advisor in Ontario with Toronto-based CIBC Wood Gundy. “We’re not comparing apples to apples here.”
Adds an advisor in the same province with Mississauga, Ont.-based Investment Planning Counsel Inc.: “[The firm’s program] does it all by gross revenue, so all the people with assistance get all the rewards – and me, as a lone wolf, I get nothing.”
Still, one of the biggest complaints among advisors was that striving to meet the sales targets for rewards interferes with advisors’ ability to provide excellent client service. Says an advisor on the Prairies with Toronto-based BMO Nesbitt Burns Inc.: “The longer you’re in the business, the more you realize it’s a conflict of interest. You risk putting aside the important stuff, such as client service, in order to get that carrot – and you end up doing more business than is necessary or sustainable.”
“We all pretend [rewards and recognition] are not important, but they are,” says an advisor in Atlantic Canada with Burlington, Ont.-based Manulife Securities. “I don’t like compensation and rewards based on in-house products, but it’s becoming more and more like that.”
Despite the widespread dissatisfaction, certain firms were praised for having rewards that are attainable by advisors at all stages in their careers. Case in point: advisors with Mississauga-based IDC Worldsource Insurance Network Inc. (IDC WIN) rated their firm at 8.9 in performance in the category, saying they value their firm’s initiatives to recognize its entire sales force.
“There’s a good variety of rewards,” says an IDC WIN advisor in Ontario. “And the firm recognizes people at all levels, not just for total sales.”
Advisors with Mississauga-based Edward Jones also were impressed with their firm’s program, giving it a performance rating of 9.3. In particular, those advisors were very pleased with the firm’s attainable perks.
“[The firm] tries to be fair to new advisors with its rewards,” says an Edward Jones advisor in British Columbia. “You still have the chance to earn them, as they try to treat you like a veteran. Everyone is given a chance.”
Adds a colleague in Ontario: “Everyone can qualify if they meet minimum requirements. There is an ‘all expenses paid’ trip every six months. It’s extremely fair and achievable.”
Edward Jones’ success in this category may be due, in part, to its method of evaluating success. The firm considers client satisfaction a key metric, along with sales targets.
“We have conferences for financial advisors based on their level of business [and] based on the client experience that they’re delivering as we survey our clients,” says David Lane, Edward Jones’ principal and head of Canadian operations. “Then, financial advisors have the opportunity to go on diversification trips, which are paid for by the firm as recognition for the good work they’ve done.”
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