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.
Financial advisors at the firms included in Investment Executive’s Dealers’ Report Card tend to value their independence. However, the 2020 results indicate that they still feel best supported when their dealers express strong strategic direction and foster positive corporate cultures.
Looking across all dealers rated this year, the average performance rating for “firm’s strategic focus” was 8.3, up 0.3 compared with 2019. The average rating also was 8.3 for “firm’s corporate culture,” up 0.4 over last year.
However, firms may be falling behind in terms of meeting advisors’ expectations: the average importance rating was 9.0 for firm’s strategic focus, representing a satisfaction gap (the amount by which a category’s importance exceeds its performance) of 0.7, and 8.8 for corporate culture, representing a gap of 0.5. (That compares to gaps of 0.5 and 0.4, respectively, a year ago.)
Advisors also were less than satisfied regarding “firm’s reputation with clients and/or prospective clients.” On average, advisors rated the category 7.9 while the importance average was 9.0 — leaving a gap of 1.1, up from 0.8 last year.
One firm that achieved higher ratings than a year ago in all three of those categories was Toronto-based Assante Wealth Management (Canada) Ltd. The dealer also had the highest 2020 ratings out of all firms for both its strategic focus and reputation with clients (9.2 and 9.1, respectively, and up from 8.6 and 8.9).
Many Assante advisors credited the leadership of Kurt MacAlpine, who took over as CEO of Toronto-based parent company CI Financial Corp. in September 2019. Under MacAlpine, CI Financial has identified the growth of wealth management as a core strategic goal, says Sean Etherington, president of Assante Wealth Management.
“[MacAlpine] has been updating advisors and leading the firm in the right direction,” says an Assante advisor in B.C. “We met with him when he was in town [and] the communication has been excellent.”
Assante was rated 9.1 for corporate culture, up from 8.7 a year ago. “It’s changing and improving; they’ve adjusted the corporate staff,” says one Assante advisor in Ontario.
About the firm’s reputation with clients, one respondent said Assante has been successful in building its brand despite the ubiquity of bank-owned brokerages.
While clients might choose advisors based on the strength of their personal relationship, recognition of a firm’s brand makes it “easier for clients and prospects to feel comfortable,” says Etherington.
Mississauga, Ont.-based Investment Planning Counsel Inc. (IPC) was the only firm to collectively improve significantly (by half a point or more) vs last year in the strategy (8.9, up from 8.1), culture (9.1, up from 8.1) and reputation categories (8.6, up from 7.9). IPC advisors said that leadership is focused on helping advisors grow irrespective of business model.
“[IPC] always aligns their business plans to what an advisor’s business plan is,” says an IPC advisor in Ontario. “They execute really well.”
Another IPC respondent in the Prairies says, “Ultimately, [they’re] helping advisors build a better business.”
Reggie Alvares, executive vice president at IPC, confirms that the dealer accommodates a variety of business models: “Our focus is helping advisors build their enterprise value. When one day they decide [to exit the business], they would be monetizing it at a far better value than when they got in.”
Advisors at IPC say the dealer itself isn’t well-known on the street. However, it does help that IPC is a subsidiary of a financial powerhouse. “[Clients] know who Power Corp. is,” says an IPC advisor in Ontario.
Winnipeg-based IG Wealth Management also improved significantly year-over-year in the strategic focus and corporate culture categories, going to 8.5 from 8.0 and 7.7 from 6.6, respectively. However, its rating for reputation with clients fell 0.3 to 7.2.
Advisors surveyed said the firm served the middle market in past years, but is now focused on the mass-affluent and high net-worth segments — which has led to uncertainty and confusion in the near term. One issue, says one IG Wealth advisor in Ontario, is “the changes haven’t been publicized enough to the people we would want as clients.”
Nevertheless, the firm seems to be turning a corner: “They’re ahead of the curve on this [strategic focus],” says an IG Wealth advisor in B.C.
Brent Allen, senior vice president of distribution operations with IG Wealth, acknowledges that there has been some disruption as the firm’s strategy has transformed. However, he says, the firm’s platform infrastructure and technology upgrades will help both advisors and the firm in their “partnership” to serve clients. “We can only be successful when both groups of people do their jobs extremely well,” Allen says.
On the other hand, advisors at Calgary-based Portfolio Strategies Corp. rated their firm 7.1, down from 7.7 a year ago, for reputation with clients. While most of the dealer’s advisors said the firm’s lack of a public profile was unimportant, others noted that it represented a drawback: “Most clients are interested in me personally, but it’d be nice [for the dealer] to be more known,” says a Portfolio Strategies advisor.
Still, the majority of advisors said they liked the way Portfolio Strategies lets them run their businesses without interference while also providing support in key areas such as compliance.
Notably, advisors at Portfolio Strategies gave an 8.8 rating for “firm’s stability,” up significantly compared with a year ago.
“[CEO] Mark Kent has a great grasp of what it is that we want here,” says a Portfolio Strategies advisor. “He fights for us.”
Kent says the dealer’s priority will always be the advisor’s reputation: “We’ve always felt that [the advisors] are the brand in the field.”
The dealer may not offer a lot of extra frills, he adds, but “we’re a low-cost service provider model. It’s not very sexy but it’s what advisors want; they’re entrepreneurs.”