satisfaction / illustration

Branch-based financial advisors and planners at the Big Six banks have been holding their own since Covid-19 turned the world on its head, but that doesn’t mean the banks can relax, according to research from Investment Executive’s 2021 Report Card on Banks.

“The industry needs to be aware of client behaviours and how they’ve changed over the last year,” said an advisor in Quebec with National Bank of Canada. “Employers should adapt but it seems management is still using 2019 metrics. They have to understand times have changed.”

This year marked a return for the Report Card; data was not collected in 2020 due to the pandemic. As such, this year’s results chart contains no year-over-year comparisons.

Comparisons with 2019 data, however, revealed more positive advisor sentiment in 2021, despite the pandemic. None of the six banks experienced a significant decline in their IE ratings compared with two years ago (an IE rating is the average of all of a bank’s category ratings). What’s more, 25 categories — up from 20 in 2019 — saw significant improvements (of half a point or more) in their average ratings. Only 15 categories experienced a significant decline, down from 33 in 2019.

The three best-performing categories in 2021 were “Ethics” (9.3) “Branch manager” (8.8) and “Reputation with clients” (8.8), all with similar ratings to 2019. The worst-performing categories were “Back office & administrative support” (6.9) and “Social media support” (7.2).

The average book of business for survey participants gained ground since the last Report Card (see story). Yet, while book values have risen, advisors expressed concern over changes to their firms’ product shelves. Most of the banks have been reviewing their fund shelves to address the Canadian Securities Administrators’ client-focused reforms.

Toronto-Dominion Bank’s TD Wealth Financial Planning division announced in March it would tighten rules around third-party product use as of June 30. TD subsequently reduced its product shelf by 15%. This change had many advisors up in arms, a sentiment that was reflected in the bank’s 6.5 rating for “Freedom to make objective product choices” — the lowest rating in that category this year (see story).

Branch-based advisors also voiced opinions about changes to their compensation packages. While compensation and bonuses have traditionally been based on metrics tied to performance and product sales, banks are now considering additional factors such as the completion rate of client financial plans and the results of client satisfaction surveys.

“[The] client satisfaction rating affects [our] bonus,” said an advisor in Ontario with CIBC Imperial Service, a division of CIBC. “I like that structure, because the financial planning that we provide provides value, and our bonus goes up based on that.” CIBC was rated 9.1 for “Total compensation,” leading the pack in 2021, and 9.1 for “Bonus structure,” a revamped category for this year. (See the “How we did it” sidebar.)

Bank branches were deemed essential services, so many Report Card on Banks respondents continued to go to their workplaces, unlike other advisors surveyed for the Report Card series.

Advisors were asked to rate the pandemic support they received from their banks. By and large, they were happy, giving an average rating of 8.8 (this rating does not appear on the main chart). Investments in technology and additional health support, such as enhanced wellness accounts, contributed to the strong rating. (See story.)

“We were up to date with technology right away and had sessions for mental health. [There was] lots of support,” said an advisor in Ontario with Royal Bank of Canada’s RBC Financial Planning division. RBC’s pandemic support had the highest rating of all banks at 9.6.

Many advisors with Bank of Nova Scotia and Bank of Montreal reported to their branches, while the other four banks offered more work-from-home flexibility.

“We kept basically everything open,” said a Scotiabank advisor in B.C. “The bank did a good job getting [personal protective equipment] and things like that for us, so the clients are happy, but employees in the frontline still had to come in.” Scotiabank was rated 8.2 for pandemic support.

As banks adjusted to meet the changing needs of clients over the past year, advisors too seemed to reprioritize the resources they deemed most important.

For example, the importance rating for “Support for wills & estate planning” fell to 8.7, compared with 8.9 in 2019. The category also had a smaller satisfaction gap (the amount by which a category’s importance rating exceeds its performance rating) of 1.0 compared with 1.3 in 2019.

Even so, some advisors expressed a desire for more support in this area.

“[Resources for wills and estate planning are] not as prevalent in banks as they should be,” said an advisor with Scotiabank in Ontario. Scotiabank was rated lowest out of all banks for wills and estate support at 7.2.

A CIBC advisor in Ontario said wills and estate planning are “a big priority, because clients have a lot of questions. It can be overwhelming for them.”

CIBC was the highest-rated bank in the category with a rating of 9.0.

How we did it

Research for Investment Executive’s 2021 Report Card on Banks (RCB) was conducted by five research journalists: Camille Côté, James Gaughan, Emily Fox, Surina Nath and Daniel Reale-Chin. The researchers held phone interviews with 244 financial planners and advisors with Canada’s Big Six banks between March 29 and May 3.

Advisors interviewed were branch-based employees with the banks’ retail divisions. Advisors with the Bank of Nova Scotia, unlike other survey respondents, serve assigned groups of clients out of a collective base and cannot provide individual book data.

This year marks the return of the RCB; the research team suspended the 2020 edition due to Covid-19. The pandemic has continued to affect the research, which has resulted in the 2021 survey sample being smaller than in previous years. Pandemic burnout may have taken a toll on branch-based financial planners at banks, who are classified as essential frontline workers.

Advisors were asked how they felt about the support services and programs offered by their firms. Survey participants provided two ratings — one for performance and one for importance — on a scale of zero to 10 for each of the 29 categories included on the main chart (excluding the IE rating and Net Promoter Score). Advisors were asked to provide ratings only for the services with which they had direct experience.

As part of ongoing efforts to improve the research, the team removed four categories: “Support for developing an investment plan for clients,” “Firm’s delivery on promises,” “Online account access for clients” and “Firm’s reward/recognition program.” The rewards category was replaced with “Bonus structure,” which had previously been included under “Total compensation.” Similarly, the online account access and “Client account statements” categories were merged. Finally, the team added the “Client onboarding tools” category.

Some category names were rephrased to better reflect the service being rated. For example, “Firm’s marketing support for advisor’s practice” is now “Business development support” and “Firm’s stability” is now “Leadership stability.”

Other categories in the main chart were renamed for simplicity, but the criteria being evaluated did not change.

The two supplementary questions for 2021 were designed to gain insight on current industry trends. Advisors were asked to rate how well their firms supported them during the Covid-19 pandemic. They also were asked how well their firms prepared them for the Canadian Securities Administrators’ new conflict-of-interest requirements, which took effect June 30.

— Fiona Collie, Katie Keir