Product manufacturers must keep their lineups simple if they want to appeal to financial advisors and their clients, according to a panel of advisors who spoke at the 2016 Canadian Funds Summit in Toronto on Tuesday.
The advisors on the panel shared their thoughts about the ways in which their product partners can make advisors’ jobs easier — and it seems that product providers have some work to do in making a quickly evolving fund landscape easy to understand.
“I know fund companies want to come up with trendy products and ‘flavour of the day’ products, which are fine and you need those too, but products need to be simple to understand both from the advisor’s perspective and from the client’s perspective,” said Tina Tehranchian, a senior financial planner and branch manager at Assante Capital Management Ltd. in Richmond Hill, Ont.
Tehranchian made it clear she excludes funds that do not meet her standards of simplicity. For example, she told the audience she has stopped using segregated funds, except when it was critical to clients’ financial planning, because these products change so often.
Tehranchian called on product providers to create funds with longevity in mind and to consider fewer changes to their product lineups because the manufacturers are “confusing clients and confusing advisors— and that’s not a good thing.”
Another way in which fund providers can win over advisors is to create a personalized relationship with those advisors, said Susan Le Roy, senior wealth manager with Bank of Nova Scotia’s wealth-management division in Torontoo.
Le Roy told the audience the plethora of product choices has also motivated her to shorten the list of products she makes available to her clients. The funds that do make it into her portfolios tend to come from product manufacturers with which she has established a close relationship.
For example, Le Roy said that one product provider makes its chief investment officer (CIO) available to her for quarterly meetings so the CIO can discuss the provider’s plans and his thoughts on the current market environment. This is information that helps Le Roy stand out to clients in a competitive industry that now includes robo-advisors, she said.
“I need you, as a provider, to give me the information that will distinguish me from that machine,” Le Roy said.
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