Although the market downturn and ensuing economic recession hit the financial services industry channels very differently, many advisors surveyed for Investment Executive’s 2010 Report Card series found common ground in the support they looked for from their firms. In particular, advisors say, they wanted concrete advice, not only to help them weather the storm but so they could be more successful and confident when the recovery begins in earnest.

To find out how the industry channels handled this task, IE asked advisors to rate their “firm’s support during the market downturn” in a supplemental question in all four advisor Report Cards. The firms that performed best offered their advi-sors timely advice and constructive solutions for handling situations during the downturn — and for preparing their skills for the future.

The executives at these firms often contacted advisors personally, provided educational materials and held meetings to discuss changes in business practices and how to best work with clients. On the other hand, firms that did not rate as highly often made cuts that limited communication between advisors and their head offices, or gave untimely advice and unsuitable educational materials.

Advisors with Toronto-based Richardson GMP Ltd. praised their firm’s collaborative and practical approach in providing support during the downturn. “They really demonstrated the partnership culture,” says an advisor in Ontario. “We got personal support and acknowledgment from our chairman.”

In addition to personal phone calls, the firm helped advisors by providing ideas on how to help clients weather the rough ride as well as ways to help advisors improve their businesses down the road. The firm not only had weekly conference calls to discuss ideas and strategies, says Andrew Marsh, Richardson GMP’s CEO, it also hired a sales coach to give advisors tips when the downturn was at its nadir.

The coach continues to work with Richardson GMP advisors, and more are taking advantage of the service, says Marsh: “They’ve really taken the challenge by the horns and have really adopted the motto ‘Let’s come out of this stronger than when we went into it.’ And, as a result, I’ve seen a lot of people taking a look at how they run their practices and ways to improve.”

In the dealer channel, advisors with Mississauga Ont.-based PFSL Investments Canada Ltd. were enthusiastic about the educational approach their firm took in leading them and their clients through the downturn. Says an advisor in Ontario: “It was fantastic, because we educated our clients on how [the market] works. They were educated as to why the market did what it did and to stay with things that work [over the long term].”

A part of that support and educational materials was the Why Now? campaign that PFSL launched to discuss and promote investing in the market. The firm encouraged clients to do “the opposite of the herd” and invest, says Jeff Dumanski, the firm’s president and chief marketing officer: “We did a lot of insert letters in client statements about market volatility.”
@page_break@By creating confidence in both the markets and advisors, PFSL could also move forward with its business strategy, which is focused on advisor recruitment. Dumanski says the firm is doing well in this area, even as the markets move into a slower recovery.

Similarly, Winnipeg-based Investors Group Inc. used several resources, ranging from face-to-face contact to digital and printed materials, to reach out to advisors and clients alike during the downturn. The firm launched a cross-corporate team during the recession to work with advisors and find the best ways to speak with clients and educate them on what was happening.

Investment-management professionals and senior executives provided information to advisors to contextualize what was happening through different means, including webcasts, says Kevin Regan, Investors Group’s executive vice president of financial services. This initiative, in addition to the firm’s regular communication, is still in place and being used by advisors to focus on clients’ situations and obtain relevant and useful advice as market conditions change.

The relevancy and availability of Investors Group’s communications materials is what made its advisors so positive about their firm’s support during the downturn. “They were very proactive, constantly informing us on a weekly basis,” says an advisor in Ontario. “There was lots of information for clients, including webcasts and podcasts.”

For Toronto-based Royal Bank of Canada, a key component in its support during the downturn was getting in front of advisors and their clients and presenting lots of information to build confidence. RBC, which was one of the highest-rated firms in the downturn support category in the 2010 Report Card on Banks and Credit Unions, held more than 60 presentations nationally from November 2008 through this past February. Says Michael Walker, vice president and head of branch investments: “We were in front of thousands and thousands of clients with some of our key people in investment and business, assuring them and giving them advice.”

Says an RBC advisor in Atlantic Canada: “They did a great job of explaining what’s going on in the market. The people running funds were front and centre.”

This in-person approach was in addition to the usual daily market update sent out to advisors, which focused on strategies to handle the downturn, says Walker: “It was articles, it was techniques and approaches, it was statistics. It was really giving them the facts and background and support they really needed.”

An RBC advisor in Manitoba was supportive of this effort: “They regularly gave us updates and the information we needed to assure our clients.”

Meanwhile, for advisors in the insurance channel, the downturn hit them a little differently, as their clients were not as entangled in the markets. For those advisors who had dipped a little more into mutual funds when the markets were stronger, Calgary-based managing general agency PPI Solutions Inc. (formerly Financial Management Group of Cos. Inc.) provided support by helping its advisors focus more on selling more stable insurance products, says president and CEO Jim Virtue: “We helped advi-sors by giving them marketing ideas, tools, sales concepts — all focused toward selling more insurance.”

PPI Solutions advisors liked their firm’s approach. Says an advisor in Atlantic Canada: “They were proactive about the options we could take with the downturn.”

In contrast to these firms, those that did not fare as well provided their advisors with limited support. Advisors with Edmonton-based Servus Credit Union felt that any communication materials they received from their firm were out of date and too standardized. Says an advisor in Alberta: “There was no special support. There was one boilerplate letter they sent out to clients — and that was it.”

IE