This article appears in the June 2020 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
The 2020 Dealers’ Report Card reveals that financial advisors are generally satisfied with their dealers’ digital offerings.
The three main technology-related categories saw significant performance rating jumps (by half a point or more) in this year’s Report Card. These include “technology tools and advisor desktop” (8.0, up from 7.4 a year ago), “support for mobile technology and the mobile advisor” (7.8, up from 7.1) and “support for using social media” (7.3, up from 6.8).
The importance ratings for the technology categories have increased over the past five years. As firms have invested more in their digital capabilities, the satisfaction gaps (the amount by which a category’s importance exceeds its performance) for both the technology tools and mobile advisor categories have shrunk in recent years.
Windsor, Ont.-based Sterling Mutuals Inc. led in the technology tools and mobile advisor categories, receiving ratings of 9.5 and 9.3, respectively. Several of the dealer’s advisors credited efficient and “cutting-edge” in-house tools as the main reason.
“They keep improving the technology,” says one Sterling Mutuals advisor, while another of the firm’s advisors calls their proprietary digital system “the best-in house platform in the entire industry.”
Some Sterling Mutuals advisors requested planning software, e-signatures and digital documents. The last two features are part of a package that the firm released recently due to the impact of the pandemic, says Nelson Cheng, CEO and founder of Sterling Mutuals.
“We’re always looking for efficiency,” he says. “We are open to suggestions for how to do things better and faster.”
Three other dealers (in alphabetical order) saw significant year-over-year increases in both of their ratings for the same two categories: Toronto-based Assante Wealth Management (Canada) Ltd., Mississauga, Ont.-based Investment Planning Counsel Inc. (IPC) and Winnipeg-based IG Wealth Management.
IG Wealth improved by more than a full point for both its technology and mobile advisor tools (rated 7.5 and 6.8, respectively, up from 6.4 and 5.6 last year), a rebound from its poorer 2019 performance.
Advisors at all three firms said their dealers were modifying their digital tools and systems, causing short-term pain. Nonetheless, says one Assante advisor in B.C., “Everything is being rebuilt and it will look better in three months,” while an IPC advisor in the Prairies says, “Tech is improving; God bless their souls.”
About the technology improvements at IG Wealth, one advisor in Ontario says, “It’s like road construction: when it’s happening, it sucks. But after, you have a better road [and] you love it.”
Brent Allen, senior vice president, distribution operations, at IG Wealth, says the dealer is improving client management systems, online advisor portals and more. He adds that the changes were “planned and anticipated” with the goal of getting “the technology into the hands of our advisors faster.”
Conversely, the majority of advisors at Oakville, Ont.-based Manulife Securities said they were frustrated with “medieval” and “hard-to-use” software that wasn’t streamlined. Manulife was rated lowest out of all dealers for its technology tools and mobile advisor capabilities (6.8 and 6.0, respectively, down from 7.0 and 6.6 a year ago).
“We haven’t really invested in the old portal for a few years,” acknowledges Rick Annaert, president and CEO of Manulife Securities. “I can understand when advisors are sometimes critical [but] we are enhancing the new portal.”
Across all dealers, advisor sentiment was more positive than a year ago for “back office and administrative support” (rated 7.9 on average, up from 7.6 in 2019), “client account statements” (rated 7.7, up from 7.2) and “online account access for clients” (rated 8.0, up from 7.8).
In these areas, four firms saw significant ratings improvement in the back office category while five firms improved significantly in the client statement category. Still, persistent satisfaction gaps remained, with the back office category having the largest gap (1.6) out of all areas measured.
Some advisors at Lévis, Que.-based Desjardins Financial Security Independent Network (DFSIN), which received the lowest back office rating in this year’s Report Card (6.9, the same as 2019), cited a troublesome language barrier.
One DFSIN advisor in B.C. says, “It is very hard to communicate with them,” and another of the dealer’s B.C. advisors says, “Things get lost in translation somehow.”
Overall, DFSIN’s advisors said they wanted more back office staff, better processing times and broader support for all provinces and lines of business.
“We’re on a journey to essentially update every aspect of technology,” says Denis Dubois, president and COO, Desjardins Financial Security. The firm is making the transition to Dataphile, for instance, to boost advisor and client access. As for language barriers, he says, the dealer makes an effort to adapt communications and understand each region’s needs.
Manulife Securities also had a rough showing, receiving the lowest ratings out of all firms for its client statements (6.4, down from 6.8 in 2019) and online client access (5.0, down from 5.3). Some advisors blamed the industry for hard-to-read statements, and hinted at improvements by their firm, but the majority said clients want more graphs, charts and better-organized information.
“The statements are limited in terms of content and base values. Even as an advisor, I can’t pull more information in, and the online stuff is brutal,” says one Manulife advisor in Alberta.
Manulife’s back office has long been accessible through remote and mobile technology, says Annaert. The dealer’s digitization of account opening and maintenance has been delayed due to Covid-19, he adds, but “it’s ready to go” and the next step is revamping clients’ statements.
The only firm to simultaneously improve significantly year-over-year in the back office and two client account categories was IG Wealth, although its ratings were on the lower end of the scale. Advisors acknowledged that the dealer has made changes to create a more “modern” experience, but consistently said their new statements are more complex and unpopular with clients.
Numerous advisors also mentioned delays in accurate market pricing via online client account tools as well as “a lot of mistakes” made by the back office.
“That’s not acceptable, especially now with the market going up or down wildly because of the virus,” says an IG Wealth advisor in Atlantic Canada.
Allen says new online hubs for advisors and clients are coming, and that the firm wants to provide flexible online statements that can be “much more personalized.”
About potential mistakes, he says, “We’re quite confident in our [back office] accuracy for the number of transactions we do annually, which is in the millions. Having said that, we’re focused on re-engineering business practices” to help eliminate human error.