Shifting client expectations, fuelled in part by regulatory changes such as the second phase of the client relationship model (CRM2), will lead advisors to move to firms that can offer more complete wealth-management services, according to the head of Toronto-Dominion Bank‘s (TD) high net-worth wealth-management business.

“If you think about CRM2 and the pressure that will be created on the value proposition that advisors deliver,” says Dave Kelly, senior vice president at TD Wealth Private Wealth Management (TDWPWM) in Toronto, “the integrated wealth-management offer that we’re enabling our advisors to deliver is becoming more and more compelling.”

Last year, TD Wealth signalled it had ambitious hiring plans: at an investor conference in Montreal in September, Leo Salom, executive vice president of wealth management with TD, told an audience of institutional investors that he planned to add 500 advisors over the next three to five years, with one-third of those dedicated to high net-worth clients and two-thirds to the branch-based mass-affluent market. “We have the capacity to do that,” Salom said. “We’re still slightly undersized [compared] to some of the competitors in the marketplace.”

TD has about 750 advisors on its brokerage platform; roughly 300 in its private banking, private investment counsel, and private trust arms; and 65 on its wealth-advisory services team. Those numbers have stayed relatively flat over the past year, TD says.

Where TD has been hiring recently is in its “wealth advisor” position, a relationship-management role for dealing with new clients. TD has increased its numbers in that position to about 60 from roughly 40 last year.

“If I use a three-year time horizon [for our hiring target],” Kelly says, “we’ll probably be a little more loaded at the back end as the business continues to grow.”

Kelly suggests that, as investors begin receiving their CRM2 statements and see more clearly what they’ve been paying for advice, opportunities will open up for advisors who can offer overall wealth-advisory services to them.

Team-based approach

“This will be the single best time to acquire currently advised clients that we’ve seen in years,” Kelly says. “Not everybody’s ready.”

Last year, TD launched a reconfigured high net-worth business line, rebranded as TDPWM, with a focus on a team-based approach to advice. As part of its transformation, TD has been positioning the financial advisor as a lead relationship manager first, shifting away from the more traditional investment-manager role.

“If I can get our very best high net-worth brokers to act as high net-worth advisors, and truly franchise their clients effectively,” Salom said at the investor conference, “that’s an extremely powerful model.”

TDPWM is not alone in making changes to meet changing client needs. Bank of Nova Scotia, for example, restructured and rebranded its wealth advice business in December 2015 to emphasize integrated service, relaunching under the Scotia Wealth Management banner.

Consensus

“There’s a consensus in the industry that if you want to differentiate yourself as a financial advisor and you want to be able to command a premium, you have to go beyond just investment advice,” says Dan Richards, CEO of Clientinsights in Toronto. “That’s why every firm out there is emphasizing the broader array of wealth-management advice options.”

So far, the focus at TD has been growing its advisor base organically, rather than through acquisition.

TD is pursuing initiatives such as leveraging technology, in part through feedback surveys and data analysis, to identify clients who may be open to receiving wealth-advisory services. “You continue to see very strong referral flows,” Kelly says, “both to TD Wealth and from TD Wealth to other parts of the bank.”

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