Changes at the top result in weak scores on stability

However, a few firms — World-source Financial Man-agement Inc. and Professional Investment Services (Canada) Inc. , both based in Markham, Ont., and Regina-based Partners in Plan-ning Financial Services Ltd. — scored relatively low in terms of stability. The reason? They underwent a change in ownership or had significant turnover in senior management in the past 12 months.

Partners in Planning advisors gave their firm a 7.7 in terms of stability, the lowest score in the survey, with many reps saying they were unsure about the company’s direction. In March, ECI Investments Ltd., a subsidiary of Calgary-based holding company InterBorder Holdings Ltd., purchased Partners in Planning for $28 million.

“I’m a little nervous as to what the new owners’ expectations will be now,” says a Partners in Planning advisor in Saskatchewan.

“It’s in the very early stages, so we don’t know much,” says another in Ontario.

As well, Partners in Planning advisors expressed concerns about lack of communication between the new management and advisors, and complained about the previous regime’s failure to deliver on promises, including introducing effective new technology and launching an Investment Dealers Association of Canada platform.

“The software program took two years to get going, and then failed,” says a Partners in Planning advisor in Ontario.

“The firm has been talking about an IDA platform for five years,” says a Partners in Planning advisor in British Columbia, while a B.C. colleague adds: “It has taught me not to expect things.”

Hugh Gabruch, Partners in Planning’s general counsel and chief operating officer, acknowledges that there might be some degree of uncertainty among advisors. But, he says, the company was holding off addressing advisor issues until its national conference in Niagara Falls, Ont., scheduled for the last week of May: “We’d rather announce developments in a more blockbuster way than in a trickle.” He says a major announcement in the technology area and “several major announcements in the product area” were planned for the conference.

Partners in Planning had been on the selling block for some time before ECI acquired it, so some Partners in Planning advisors say they are happy to see the ownership question finally settled — and hope that the company will continue to respect advisor independence. Some express cautious optimism about the new owner and hope it might pump additional resources into the firm.

“The new owner has deep pockets, is very people-oriented. There’s a Western Canadian, homey, family feel to it,” says one Partners in Planning advisor in Ontario.

“It has tons of cash; that’s why it bought us,” adds another in Alberta.

Meanwhile, Worldsource, which scored a 7.9 in stability, has undergone a number of executive changes over the years, leaving some advisors confused about the firm’s strategic direction. “There has been so much turnover at the executive level, we don’t really know what’s going on,” says a Worldsource advisor in Alberta.

Andy Mitchell replaced Anthony Stockley last year as the firm’s president and chief operating officer. “We have had a high turnover in regard to senior-level positions,” Mitchell says. “One of my main goals is to make sure there is more stability in the organization.”

He is making sure the company participates in industry issues and developments and that “the advisors are kept abreast of that.” Head office communicates with advisors by e-mail, telephone and face-to-face meetings, Mitchell says, adding that Worldsource has quarterly advisor, branch manager, administration and compliance councils.

Some Worldsource advisors express happiness with the new leadership. “Now that we have a new CEO, it’s great,” says an advisor in Ontario.

Although PIS scored a relatively low 8.1 in terms of stability, the firm saw a big improvement from last year’s score of 7.0. Last fall, a subsidiary of Australia-based Professional Investment Holdings Group, acquired Calgary-based mutual fund dealer Generation Financial Corp. and rebranded it as PIS.

@page_break@While Generation operated under a desk-fee model, PIS uses a grid model. However, PIS has said that existing Generation advisors located in Western Canada will be allowed to continue on a desk-fee model.

“We basically froze Generation’s grid for six months and said to the advisors, ‘Give us a chance to prove we are going to do all of the things we said’,” says Ken Rousselle, PIS’s president and CEO. “They seem to be pretty pleased with what we did. But until we actually launch our business development model, we are not forcing anyone to move.”

PIS has a unique business model that sees advisors work in partnership with accountants to provide clients with advisory services, in return for equity and a slice of the fees.

So far, the former Generation advisors are taking a wait-and-see approach, and some say it’s an improvement over what they experienced at Generation.

“Stability was a 1 with Gen-eration. But with PIS, it has really climbed to a 7,” says a PIS advisor in Alberta.

“From what I’ve seen, it looks like it’ll be great,” adds another.

Other PIS advisors complain about a lack of communication from the new ownership and about a difficult technology changeover recently undertaken during the key RRSP season.

Rousselle regards communication as vital, and makes sure head office is keeping advisors “in the loop and feeling part of the organization.”

PIS was set to hold its annual strategic review conference — to which all of its advisors are invited — in Banff, Alta., in late May. Rousselle plans to update advisors and get their feedback on recent changes. “There’s a lack of direction today,” says a PIS advisor in Alberta, “but that will be resolved when PIS starts changing things.” IE