Advocis, the national association for financial advisors, reported a surplus for the second consecutive year after operating at deficits in 2022 and 2023. Once again, the association achieved the positive result through cost-cutting, as revenue lagged in 2025. Also weighing on results was a more than $250,000 loss for subsidiary Advocis Broker Services Inc. (ABS), motivating CEO Kelly Gorman to overhaul the in-house brokerage’s oversight and operations.
For 2025, Advocis posted an excess of revenue over expenses of $1.9 million, based on summaries of the association’s consolidated financial statements included in the latest annual report. (Advocis held its annual general meeting on June 30.) The surplus was up more than 5% from $1.8 million the previous year and compared to deficits of $766,426 in 2023 and $2.7 million in 2022.
Cost savings drove the result as revenue dropped more than $1.3 million year over year — nearly 11% — to $11.1 million. Operating expenses were down almost 17% year over year to $7.4 million, representing nearly $1.5 million in savings.
“The 2025 results reflect a year of disciplined cost control and operational efficiency,” according to the management discussion and analysis (MD&A) in the annual report.
The $1.5 million in savings included a $1.2-million reduction in “professional and consulting fees,” which came in at $1.3 million compared to the previous year’s $2.5 million. “As the organization returns to stability and addresses legacy issues, the need for external expertise and counsel has declined, bringing these costs more in line with historical levels,” the MD&A says.
As Advocis restructured over the past few years to address its troubled finances, five legal claims arose from past executives and vendors, two of which are ongoing. An additional potential claim was resolved last year.
ABS operations under scrutiny
ABS, Advocis’ for-profit brokerage that provides individual and corporate insurance, reported a loss of $258,142 in 2025 — nearly four times its loss of $68,391 the year before.
“In 2025, the conclusion of a longstanding corporate partner agreement resulted in an approximate 25% reduction in the ABS policy book, negatively impacting revenue while fixed administrative and operational costs remained,” the MD&A says.
“Pooled funds contributions” from the insurance business were down nearly 39% to $1.2 million, compared to $2 million the prior year.
ABS is accounted for in Advocis’ financials using the equity method, and the association’s shareholder deficiency in the brokerage doubled year over year to $503,900. In the past decade, Advocis’ deficit in ABS has ranged from $704,000 (2016) to $177,370 (2023). ABS owes the association $829,922, up about 62% from $510,782 the prior year, representing a credit risk.
In an interview, Gorman was explicit that ABS failed to meet expectations in 2025, and suggested that its operations were in the crosshairs.
ABS is an “important service offering by Advocis for our members,” Gorman said. “Our focus is obviously going to be on measurable improvement in financial performance” and the long-term sustainability of the ABS business. The association already built a “stronger, more accountable” team, she said, adding that “it is early days” for the changes.
Last year marked Gorman’s first full year leading the association. ABS now has a new vice-president, with Lou Fisch succeeding Jack Mazakian, who had held the position since 2018. Geoff Le Quelenec, previously Advocis vice-president of technology and innovation, is now Advocis COO.
“I want to make sure we have the right people in the right roles to execute against our comprehensive strategic plan,” Gorman said.
The back office is getting an upgrade. “The more automation we’re putting in, particularly on the ABS side, allows our producers to focus on dealing with clients and getting them the coverage they need,” Gorman said.
Targeting revenue diversification
Pooled funds from the insurance business are held in trust and invested until they’re liquidated either to settle deductible amounts due or to release excesses, which Advocis takes into revenue. In 2025, Advocis reported a release of $1.15 million, which was down from $1.78 million the year prior and accounted for about 10% of Advocis’ revenue — the third largest revenue source — versus 14% the year prior.
“Each year, management determines the withdrawal amount based on risk assessments and actuarial valuations,” the MD&A says. “As a result, this revenue stream may vary significantly depending on external risk factors, investment performance and changes in the rate and timing of deductible payments.”
In total over the past six years, Advocis brought roughly $8 million of pooled funds releases (based on available figures in annual reports) into revenue, accounting for 10% to 16% of revenue per year.
The 2025 balance of pooled funds in trust ($7.64 million) is less than the balance of pooled funds payable ($7.68 million) — a difference of about $38,000. Actual amounts payable may vary materially from the estimated amounts payable, a note to the financial statement summaries says. “Management applies judgment to reasonably estimate the liability at year-end, considering a number of factors,” it says, and refers to actuarial techniques.
Gorman said the reported difference between pooled funds in trust and pooled funds payable was not a cause for concern.
“The accounting rules allow us, based on our particular [policy] agreements, some flexibility in terms of what we will carry the payable at,” she said. “Because we are very conservative, we are carrying that [payable] in excess of what the actuarial liability” estimates. As such, Gorman said she was also unconcerned about the sustainability of pooled funds releases each year.
However, “that said, this program [of releasing excess pooled funds] is still tied to the ABS book of business,” along with actuarial policy liability estimates, she said.
Advocis’ largest revenue source is from memberships, which increased 2.3% to $5.6 million in 2025, attributable to a fee hike. Total membership (all categories) dropped 4% year over year to about 7,100 members as of Dec. 31, 2025, compared to 7,400 the year prior.
Gorman aims to diversify revenue, including through designations and education. “There is a need for training for young advisors,” she said, referencing conversations she’s had with corporate partners.
The association relaunched a streamlined professional financial advisor (PFA) designation last year, and positioned the designation as the next step after the life licence qualification program (LLQP) and on the path to the recently updated chartered life underwriter (CLU) designation. This year, a renewed focus on the LLQP program is part of the association’s priorities.
In 2025, revenue from course fees — Advocis’ second-largest revenue source — dropped by nearly $850,000 (30%) to less than $2 million, with the decrease largely attributable to Advocis’ “wind-down of legacy relationships” and corporate training that mostly affected Advocis’ LLQP program, the MD&A says.
Legal claims filed against Advocis in 2024 and 2025 by SeeWhy Financial Learning Inc. alleged breach of contract related to Advocis’ payment for SeeWhy’s LLQP learning materials. Advocis settled with SeeWhy in 2024 , paying the education provider nearly $100,000; the 2025 claim is one of the ongoing legal cases that the association faces.
The annual report says the association also intends to invest in digital enhancements, including upgrades to education delivery systems, particularly for the PFA and LLQP. And Gorman said corporate partnerships are being assessed to target synergies between the ABS book of business and educational offerings.
CI fund grows to $4.4 million
The Century Initiative (CI) fund, created in 2006 to ensure the association’s capitalization and funded with premium membership fees, reached $4.4 million as of Dec. 31, 2025, up from $3.8 million the year prior and up from $3.3 million two years prior.
The CI fund had been $5.6 million at the end of 2022, but Advocis took $2.7 million from the fund in 2023 to keep the association’s fund balances positive, with $2 million repayable with interest.
Since then, there have been no withdrawals from the fund, Gorman said. And, while income earned on the fund is available for use by the organization without restriction, Gorman said gains are staying in the fund.
“The commitment is it’s going to be rebuilt back up to [$5 million] again,” whether with surpluses or market gains, she said of the CI fund. The fund has had an average compound return of 10.5% over the past five years, the annual report says.
The CI fund will remain an emergency fund, and the association will go on to build a “normal operating reserve fund,” Gorman said.
The association’s cash at the end of 2025 was $3.6 million compared to $2.8 million the year prior. Reported fund balances were $6.9 million, compared to $4.8 million in 2024 and $1.2 million in 2023. (The $5.7-million increase since 2023 comes alongside pooled funds releases of $4.5 million.)
With $5 million in fund balances considered restricted given the target amount for the CI fund, the unrestricted fund balance is $1.9 million. Advocis’ exposure to legal claims is $1.1 million, a note to the financial statement summaries says.
In February 2025, cybersecurity firm Net-Patrol sued Advocis and ABS for more than $560,000 for breach of contract, and Le Quelenec and his corporation for the same amount for inducing breach of contract. The claim filed by SeeWhy that same month seeks punitive damages of $250,000 or an amount set by the court.
In court filings, Advocis denies the allegations in these claims including allegations against Le Quelenec. The association also filed a counterclaim against Net-Patrol seeking nearly $185,000 in damages, and against SeeWhy asking for the action to be dismissed.
In an email on Thursday, Jason Knell, vice-president of corporate and advanced programs with SeeWhy, wrote, “[W]e remain confident in our position and look forward to the discovery proceedings scheduled for next week.”
Legal counsel for Net-Patrol didn’t respond to a request for an update on the cybersecurity firm’s claim.
Also in February 2025, Advocis informed members of a human rights complaint filed that month by a laid-off former employee. On Thursday, an email from Tribunals Ontario confirmed that the case awaits review by an adjudicator to determine next steps, “as the mediation conducted on Oct. 15, 2025, was not successful.”
Gorman said she can’t comment on specific cases, and that legal cases arise for every organization. “We deal with that just like every other company,” she said. “But it never deters from our mandate.”
The association will continue to invest in member services, advocacy and improved governance. Recent advocacy efforts include title protection harmonization and submissions on Ontario’s proposed rule for managing general agents. Among recent governance changes, by-laws were updated, as were board terms. The chair term was extended to two years from one, and director terms were extended to three years from two.
“You really want to have that continuity on the board where you’re not seeing a lot of turnover” so that plans are executed, Gorman said.