The significance of high-quality holistic financial planning is increasing along with the average book size of advisors, as seen in the results of the 2019 Brokerage Report Card. Overall, however, average performance and importance ratings for the five holistic planning-related categories rose marginally or stayed the same this year, compared to 2018.
In four of these categories – “support for developing a financial plan for clients,” “support for developing an investment plan for clients,” “support for wills and estate planning” and “support for tax planning” – the overall average performance ratings ranged from 7.8 to 8.4, while the overall importance ratings ranged from 8.3 to 8.9.
In contrast, the overall average importance rating of “support for insurance planning” decreased 0.1 for 2019, while overall average performance rose from 8.3 to 8.5 year-over-year.
Toronto-based RBC Dominion Securities Inc. (DS) had the highest ratings in four of the five holistic planning support categories: developing a financial plan, wills and estate planning, tax planning and insurance planning – ranging from 9.1 to 9.5. (Mississauga, Ont.-based Edward Jones grabbed top spot for “support for developing an investment plan for clients,” with a rating of 9.5.)
“[Financial planning] is an area we’re focusing on more and more,” says a DS advisor in Ontario. The brokerage “give[s] us a lot of resources,” they say, referencing how the firm can bring in planners from the financial planning team to assist high net-worth clients. (See Not good enough.)
DS advisors highlighted the firm’s financial planning software and support, also noting that lawyers and trustees can meet with clients for estate planning. DS advisors further praised the bank for putting a lot of resources into creating a “very accessible” tax planning department.
“We’re a wealth management firm, and investment management is at the core of what we do. It’s very important to our clients,” says David Agnew, CEO of RBC Wealth Management Canada.
Advisors at Edward Jones rated the firm 9.1 for “support for developing a financial plan for clients.” Advisors lauded the firm’s investment tools, including its Rebalancer program that Patrick French, principal of solutions tools and consulting Canada at Edward Jones, says advisors can use to align clients’ portfolios with their goals and risk tolerance over time.
“Almost all my clients have had their portfolios reviewed recently,” says an Edward Jones advisor in Alberta. “The firm has provided amazing software so we can customize [it]. They are constantly working to improve [the process], and I’m very happy with it.”
Despite this positive sentiment, Edward Jones saw a drop in its rating for “support for tax planning,” which fell to 6.7 from 7.3 last year. “Our firm is very conservative. They don’t want the liability, so it’s incredibly generic,” an Edward Jones advisor in Ontario says. Others said they’re encouraged to help clients work with their accountants and lawyers.
Ranked at the bottom for holistic planning categories were Quebec City-based Industrial Alliance Securities Inc. (iA Securities) and Montreal-based National Bank Financial Inc. (NBF). iA Securities ranked last for “support for developing a financial plan” and “support for developing an investment plan” (5.7 and 7.1, respectively); NBF ranked last in “support for wills and estate planning” and “support for insurance planning,” and tied for lowest rating in “support for tax planning” (7.0, 7.5 and 6.7, respectively).
Advisors approached their firm’s weaknesses differently.
Multiple iA Securities advisors said they use their own financial planning software instead of the company’s. One iA advisor in Ontario said the firm offers support but that they must pay to use it, while another cited issues related to the “functionality, reliability, accuracy and integrity” of the services offered for investment planning.
iA Securities is looking to make changes. The firm’s advisors can choose from multiple software options and price points, including PlanPlus – which iA Securities supports “from a branding and data-feed perspective.” However, executives admit there’s room for improvement. “I think we need to do more,” says John Kelleway, president of iA Securities. “I think we’re OK today, [but] it’s not where we want to be and [it’s] where we are going to want to invest more – both on the platform side [and] on the employee side.”
For NBF advisors, hurdles related to wills and estate planning specifically included accessibility to expertise and high turnover in the department, leading to issues with getting “the right people in the right place.” Several advisors said they seek the services of and assistance from third parties when it comes to tax planning.
NBF, too, seems to have an evolving strategy. As of January 2019, the firm has “regional wealth management squads” consisting of specialists such as tax, estate and financial planners, says Eric-Olivier Savoie, vice president of wealth management solutions. (Report Card research took place from January to February 2019.)
“Today, [holistic planning] is expected by clients and it’s a priority,” Savoie says.