As the pace of regulatory change in the financial services sector continues unabated, financial advisors are turning more and more to their firms for support in navigating these substantial changes.
In turn, most advisors gave high praise to their firms in the “support for dealing with changes in the regulatory environment” category: the overall average performance rating for all firms in this year’s Report Card series was 8.6, good for sixth-highest among all the categories.
Specifically, advisors lauded their firms for being proactive in dealing with regulatory changes and for being communicative and offering the tools and training necessary to deal effectively with these changes.
“[My firm] is very proactive, from high management down to lower management; they’re very good at bringing information to us,” says an advisor in Ontario with Toronto-based Bank of Montreal.
“[My firm] has been getting in front of advisors and letting us know how important these changes are and how to deal with them,” adds an advisor in Ontario with Montreal-based National Bank Financial Ltd.
Edward Jones’ advisors gave their firm the highest performance rating in this category, at 9.6, because, they said, the Mississauga, Ont.-based brokerage firm has taken this proactive approach to the next level.
“They’ve been ahead of the curve for two years now [on matters such as the second phase of the client relationship model],” says an Edward Jones advisor in Ontario. “And [the changes] have been carefully communicated to us.”
“When we look at regulatory change, we put ourselves in a position to be aware of all the developments, whether they’re out as concept papers or in the final rule form,” explains Wayne Bolton, Edward Jones’ chief compliance officer. “We are continually monitoring regulatory changes. Internally, we review them and discuss what they mean to us, our advisors and our clients.”
Part of ensuring that advisors are kept up to date and compliant on all the new regulations is by having solid and thorough communications. Specifically, advisors surveyed for the Report Card series noted that good communication with their firms ensures that advisors are compliant with any new rules that come into place.
“The head-office support staff is knowledgeable and up to date. There’s lots of advance notices,” says an advisor in Atlantic Canada with Montreal-based Peak Financial Group. “I feel well informed.”
“[My firm] communicates changes ahead of time,” adds an advisor in the same region with Toronto-based Assante Wealth Management (Canada) Ltd. “It’s really proactive. I’ve been in the industry for 32 years and I’ve never had a complaint. [Assante] makes sure I’m compliant. [Our compliance department] is on top of everything.”
Notably, Assante made significant efforts during the past several years to talk with its advisors about changes to the regulatory environment, says Steve Donald, the firm’s president.
He adds that keeping advisors up to date and informed on regulatory changes is important: “We host a networkwide conference call every quarter, talking about current initiatives in the industry and in our firm. We have monthly compliance calls with all of our branches to talk about issues. We definitely highlight how advisors should prepare their practices. Probably the most significant thing we do is a lot of internal training.”
Training leads to compliance
Through training, firms are able to articulate regulatory changes to advisors much more comprehensively. To that end, advisors surveyed for this year’s Report Card series said that workshops and seminars help to ensure advisors are well educated and stay compliant.
“The firm offers lots of support, with seminars, webinars, meetings and educational resources, to ensure that we are as prepared as possible,” says an advisor in Alberta with Vancouver-based Canaccord Genuity Wealth Management (Canada).
“[My firm] has training sessions every year on compliance and has a website that has all the compliance [information],” adds an advisor in Alberta with Mississauga-based IDC Worldsource Insurance Network Inc. (IDC WIN).
Ensuring advisors are well educated and have the proper tools available to answer any compliance-related questions is central to IDC WIN’s approach to keep advisors abreast of any regulatory changes, says Ron Madzia, the firm’s president.
“[We] have a library of tools, documents and resources on our website, so that even if [advisors] are not close to a local office, [they] can access everything [they] need remotely,” he says. “We do a lot of education; we offer particular education sessions dedicated for compliance only that are run by executives across the country. Just having stuff online and sent through email isn’t enough. You have to get out in the field. You have to make sure [advisors and staff are] out there doing [what’s] required.”
Despite advisors’ overall satisfaction with their firm’s support for dealing with regulatory changes, a small but noticeable group of advisors were not pleased with their firm’s efforts in this key category.
The most prevalent grievance among these advisors was the belief that their firms could do more to help advisors anticipate and adjust for changes.
“[My firm] waits until the very last minute to do any sort of regulatory announcements or changes. Nothing’s really done proactively,” says an advisor in Ontario with Toronto-based Bank of Nova Scotia.
Adds an advisor in Alberta with London, Ont.-based Freedom 55 Financial: “The [firm is] always behind. When there were new changes to the Insurance Act, I knew about those changes two years [beforehand].”
© 2017 Investment Executive. All rights reserved.