Variety in product shelf commended

Advisors didn’t need much prodding to discuss how their firms’ introduction of new investment products has been beneficial to their individual businesses.

“It’s important for staying competitive,” says a Servus advisor in Alberta. “If you don’t have the products, you don’t have the clients.”

Adds a National Bank advisor in Quebec: “I work downtown, with a lot of competition, so it’s important for me [to have great products].”

And a CIBC advisor in Ontario adds: “Clients are getting sophisticated and have to know [that certain products] are available.”

CIBC not only garnered a substantial increase in its performance rating in this category this year – it rose to 8.6 from 7.3 in 2013 – but its rating in the “quality of firm’s product offering” category also rose significantly to 9.1 from 8.2 last year.

There is a key reason for this, says Larry Tomei, CIBC’s senior vice president, national sales and service, retail and business banking: a new platform for market-linked guaranteed investment certificates (GICs). Previously, these GICs were available exclusively on CIBC’s securities platform; now, they’re available to advisors licensed to sell mutual funds.

“We have had wonderful results,” says Tomei of this change, adding that advisors also have expressed their satisfaction with CIBC’s personal portfolio services’ discretionary money-managed program. “Part of that program is making sure the performance stays strong. And that means changing up the managers, making asset-allocation changes on the program and making sure we have a really good balance in the portfolios.”

The changes in CIBC’s product offerings, especially the new platform for market-linked GICs, is a hit with advisors.

“I’ve seen the bank be innovative with market-linked GICs, especially with gun-shy clients,” says a CIBC advisor in Ontario. “[The bank] listens to clients’ needs and the changing demographics.”

Although, in general, advisors want access to more investment products, many advisors still prefer quality over quantity, saying they don’t want their banks or credit unions to be reckless in bringing new products to market.

“New doesn’t always mean good,” cautions an advisor in Atlantic Canada with Toronto-based TD Canada Trust. “It doesn’t matter if the product is new or old, just so long as it’s a quality offering.”

Adds a National Bank advisor in Alberta: “In this industry, it’s not about new and flashy. It’s about what works.”

Following such an approach certainly has worked for RBC. In fact, Michael Walker, vice president and head of branch investments with RBC, says the bank takes the responsibility of offering worthwhile products to its advisors quite seriously.

“An advisor can be expert and very comfortable in only so many products,” Walker says. “We have to make sure that we, as a dealer, do our due diligence – especially going into this new environment [with the introduction of the second phase of the client relationship model].”

RBC advisors say this restrained approach is a relief in an otherwise crowded product market.

“I appreciate the cautious approach, which means we are often slower to release new products than our competitors,” says an RBC advisor in Ontario. “There are so many ‘flavour of the month’ products that should be avoided.”

That careful mindset appears to be paying off. RBC advisors gave their firm top marks in the two categories related to product shelf: 9.0 for bringing new investment products to market, up from 8.2 in 2013; and 9.4 for overall quality of product offering, up slightly from 9.2 last year.

“[The bank is] doing great at this right now,” says an RBC advisor in Ontario. “They’re looking at gaps in product offering and getting quite innovative.”

The key to offering a healthy product mix is balancing the expanding shelf of both third-party and proprietary offerings with an analysis of client needs, Walker says: “The philosophy has been ‘How do we bring the best of the best? How do we package those [products] and bring them to our advisors and, more important, to our clients?'”

Fulfilling clients’ evolving needs is something the firms say requires an agile approach in which continual efforts are taken to refine the type of products being offered.

“You need to make sure you are adapting to the needs of your client constantly,” says Annamaria Testani, National Bank’s vice president, national sales, intermediary business solutions. “You can’t assume a product is agnostic – that it doesn’t change. Markets change. Environments change. Your product may no longer fulfil certain needs.”

National Bank launched three new mutual funds over the past year, and plans to introduce one or two more in 2014, she adds: “Our clients want us to provide a wider scope of products. [Clients] don’t just want five funds that are very generic, very vanilla. They want specialty products, and we can do that for them.”

Based on the performance rating National Bank’s advisors gave their firm in bringing new investment products to market – 8.0, up from 7.4 in 2013 – that approach is one advisors favour.

“We’re the best kept secret under the sun,” says a National Bank advisor in Ontario about the firm’s product shelf.

Adds a colleague in Ontario: “We have the products that differentiate us from other banks.”

“Nobody wants one solution for everybody,” Testani says. “There are ‘uniquenesses’ within our client base, and we have to make sure that we have the products to cater to that.”

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