Financial advisors in the brokerage, dealer and retail-banking sectors strive to serve wealthy clients as well as they can. Yet some advisors struggle with barriers at their firms.
Since 2019, there has been a four percentage point jump in the average percentage of clients served who had investable assets of $1 million or more (29.4% from 25.1%). Within the same period, the average percentages of clients with assets in lower ranges all fell slightly (read Advisors capture growth despite industry turmoil).
In 2017, the difference was even more pronounced: the average percentage of clients served with assets of $1 million or more was only 18.5%.
Given this trend, the importance of looking after wealthy clients is high. The collective importance average of the “Products & support for high-net-worth clients” category was 9.0 for this year. The collective performance average across the four industry segments was 8.2 in comparison, leaving a resulting 0.8-point gap between the two ratings — slightly higher than the 0.7 gap in 2019. (These ratings include the results of the Insurance Advisors’ Report Card, in which client-asset breakdown data isn’t collected.)
In 2021, several advisors said wealthy clients weren’t always getting high-end treatment. That issue even cropped up among brokerage advisors, though the gap between performance and importance ratings was smaller than for the dealer and retail bank channels (at 0.7, compared with 1.0 and 0.8, respectively).
For example, an advisor in Quebec with bank-owned brokerage ScotiaMcLeod said there was a disconnect between what was expected by high-net-worth clients and what could be offered: “You don’t go to the race track with a Ferrari body and a Hyundai engine. This is what we’re going through.” (Other ScotiaMcLeod advisors were more optimistic, noting that services were improving and more experts were available.)
In an emailed statement to Investment Executive, ScotiaMcLeod said it prioritizes personalized planning that “takes into account the entirety of each client’s needs and goals.” The brokerage continues to invest in “a high level” of support, including access to tax, insurance and business succession experts.
An advisor in Quebec with bank-owned brokerage National Bank Financial Inc. (NBF) said, “[There’s] no difference in the products and services for clients with $300,000 versus those with $30 million.” But, they added, “customers are all treated well” because there is no service hierarchy at the firm.
Patrick Gervais, vice-president of wealth management solutions at NBF, confirmed that, at the base level, “The [planning] process is always the same.” However, depending on a high-net-worth client’s situation, broader services can be offered to help advisors “adapt toward clients’ needs” and work with people’s external financial experts like accountants.
Gervais added that NBF’s Advice Suite platform is getting new features in coming months, including a retirement projection tool and better reporting.
At the same time, many advisors praised their brokerages for providing access to experts and resources, including estate and tax lawyers. They also appreciated having independence regarding the handling of wealthy clients.
“Our experts come from [various locations] across the country, and are accessible to any client, anywhere,” said an advisor in Alberta with Wellington-Altus Private Wealth Inc. This advisor pointed out that management is “open to listen and incorporate any ideas you have.”
Advisors with Dealers’ Report Card firms were seemingly less satisfied than their peers, but broad themes emerged that were tough for firms to address. Dealer respondents gave a lower performance rating for the high-net-worth category (7.6) than advisors in other channels — a full point lower than their importance rating for the category (8.6).
An advisor in Ontario with dealer firm Assante Wealth Management (Canada) Ltd. said the industry is looking to bring in more high-net-worth clients, and that advisors on the ground were struggling with volume rather than support gaps. “We are feeling the growing pains of an explosion of clients coming in with lots of money and we are just not ready for this many at once,” that advisor said.
And many dealer-firm advisors — who prioritize their independence — also said the onus is on them to ensure service standards are high, rather than their firms.
“They have all the products and tools there, and it’s up to us to take advantage of them,” said an advisor in Alberta with Investment Planning Counsel Inc.
Respondents in the retail bank channel were generally positive regarding the support offered by their firms for wealthy clients. That group gave an average performance rating of 8.3 for the high-net-worth category, although that result lagged the importance rating they gave the category for 2021 (9.1).
Those who wanted more support from retail banks also desired more personalized service for high-net-worth individuals. As one advisor in Ontario with CIBC Imperial Service put it: “Sometimes it’s little things that they need to improve. They should heighten the experience for high-net-worth [clients]. Do more, go out of your way for them.”
“People who give us more deserve to get more,” said an advisor in Ontario with Toronto-Dominion Bank’s TD Wealth Financial Planning division.
Executives with the Big Six banks generally told IE in interviews earlier this year that retail clients are expected to receive the same services regardless of asset level, and that referrals to brokerage advisors were encouraged if investors’ needs were complex.