Advisors at iqon finan- cial Inc. are weighing their options as the reality of becoming fully integrated with Toronto-based Assante Wealth Management Ltd. looms closer.

IQON’s 350 independent advisors are expecting to hear, perhaps within the month, details of the long-awaited integration, which many say will dictate their next move. Depending on how the deal unfolds, advisors will do one of two things: trade in their IQON identity for status as a full-fledged Assante advisor, or head elsewhere.

At issue for IQON advisors is the future of their compensation structure, the introduction of proprietary products, corporate branding and, most important, possibly losing the freedom of being an independent advisor.

Some warn that Assante stands to lose IQON’s biggest producers if it does not move forward with care.

“It can’t seem to understand that this is not what we want, nor is it something we’re going to tolerate,” an IQON advisor says. “We have our own business and our own brand. After all the time, effort and expense, we’re supposed to give all that up?”

It’s a question IQON advisors have been asking since the firm was acquired by CI Funds Management Inc. in 2004 and it became clear IQON would eventually merge with CI’s wholly owned dealer, Assante.

Perhaps fearing a backlash, the following year CI received an exemption from the securities commissions allowing it to offer top-producing IQON advisors a retention package for staying on board. Things quieted down until September 2005, when IQON’s Winnipeg headquarters was shut down and moved to Toronto; it now runs out of Assante’s head office.

The idea of being absorbed by the heavily branded Assante doesn’t sit well with some IQON reps, who fear losing their independence and say they don’t need the services and support Assante offers.

Another bone of contention is Assante’s corporate branding, of which many advisors want no part. Currently, IQON advisors are permitted to market themselves under their own brand name in accordance with compliance rules. It is expected that a name change will be inevitable once the merger with Assante is complete.

“The biggest worry is what will happen to our independence,” says an IQON advisor in Ontario. “Everyone’s sitting here thinking: ‘If I become an Assante advisor, does that mean I’ll be sitting under this huge corporate umbrella? What does that mean for my practice?’”

Advisors’ apprehension about the upcoming changes is understandable, says former IQON president Ken Rousselle, who headed the firm from 2000 to 2003.

“The fear is they’re going to be brought into a much bigger company with a more bureaucratic decision-making process. IQON was always known as a boutique. We were able to get advisors involved in making decisions, and we had relationships,” Rousselle says. “When you go to a bigger company, that sometimes disappears.”

IQON has been a safe harbour for independent-minded advisors, dating back to 2002, when Sun Life Financial Inc. bought rival Clarica Life Insurance Co.

Sun Life’s 1,200 or so advisors were given the option of operating on Clarica’s captive sales force platform or joining the relatively unknown IQON, which was 51% owned by Sun Life. Hundreds of advisors — many of them top producers — flocked to IQON.

The challenge to hold onto those advisors falls on the shoulders of Assante chairman and CEO Joe Canavan.

To hear Canavan tell it, integrating IQON’s no-frills dealer with full-service Assante doesn’t just make economic sense; it’s essential for survival. He estimates that within the next five to 10 years, every major dealership will be owned by an investment manager or a product manufacturer simply because the business is almost impossible to keep afloat. At Assante, he says, advisors have all the support and services they need to compete against the big banks.

IQON advisors don’t question the logic of merging the two dealers. But some question the push to rebrand themselves and take part in all Assante’s bells and whistles. As one IQON advisors puts it, Assante’s platform is “well intentioned” but unnecessary for those who have spent years establishing themselves in the industry.

Canavan acknowledges the sentiment, but maintains Assante’s model is the only way to go: “We’re in the business to serve and support full-service, professional advisors. So, if advisors want to be skinny and fiercely independent, that’s great — there are dealerships out there that will let them do that. But the reason so many companies have gone out of business or have been bought out is because they were losing money. It’s not an economical business model.”

@page_break@Canavan estimates about 60%-70% of IQON advisors are on board to join Assante, and he’s been working steadily to win over the rest. One of his biggest challenges will be debunking the perception that Assante advisors are required to sell in-house products.

“One thing that’s not well understood by IQON is that Assante advisors are independent. We have a principal agent model; they’re all independent entrepreneurs,” Canavan says. “The only difference is how we support them and all the services we can offer them.”

It’s hard to ignore Assante’s benefits. The firm is backed by a multibillion-dollar parent company, advisors will be able to own equity in the firm when it rolls out its equity ownership program next year, and there’s no shortage of training or marketing support.

But for advisors wary of change, any disruption to their business model is cause for upset. For that reason, Canavan says, IQON advisors will remain on their current MPS back-office system, and their payout and branding structures will remain intact for the “foreseeable future.”

Canavan didn’t provide details about Assante’s grid, saying only that the average advisor earns an 82% payout and the structure is “comparable” with that of IQON. For now, he is treading carefully.

What happens next depends on how IQON advisors feel about their future with Assante. In the meantime, Canavan knows what needs to be done.

“We need to prove to IQON advisors that we are an exceptional wealth-management company,” he says. “We’re in the business of helping them play at the top of their game.” IE