Hav­ing a ro­bust prod­uct of­fer­ing from firms is very im­por­tant to ad­vi­sors

Investment Executive - - CONTENTS - BY LEAH GOLOB

Ad­vi­sors were more than sat­is­fied with the ro­bust range and in­no­va­tion of prod­ucts their firms make avail­able for clients.

fi­nan­cial ad­vi­sors across the four ma­jor dis­tri­bu­tion chan­nels in­cluded in In­vest­ment Ex­ec­u­tive’s an­nual Re­port Card se­ries are more than sat­is­fied with the ro­bust range of prod­ucts their firms of­fer.

In par­tic­u­lar, ad­vi­sors with bro­ker­ages, mu­tual fund and full-ser­vice deal­ers, banks and in­surance agen­cies gave their firms an over­all aver­age per­for­mance rat­ing of 8.7 in the “qual­ity of firm’s prod­uct of­fer­ing” cat­e­gory — the fourth-high­est such score in the Re­port Card se­ries, tied with “ad­vi­sor’s re­la­tion­ship with com­pli­ance depart­ment.”

The per­for­mance rat­ing for prod­uct shelves is no­table be­cause the three cat­e­gories that re­ceived higher rat­ings — “firm’s ethics,” “free­dom to make ob­jec­tive prod­uct choices,” and “firm’s sta­bil­ity” — are the top three ev­ery year.

Ad­vi­sors across the board lauded the diver­sity of the prod­ucts they can choose from. Ad­vi­sors at firms that have the op­tion — or re­quire­ment — to sell in-house prod­ucts boasted about the su­pe­ri­or­ity of their of­fer­ings; ad­vi­sors with in­de­pen­dent firms were equally im­pressed with the full suite of prod­ucts avail­able to them from any pro­ducer or man­u­fac­turer.

For ex­am­ple, an ad­vi­sor in At­lantic Canada with Toronto-based Cana­dian Im­pe­rial Bank of Com­merce, says: “I’m 100% be­hind our pro­pri­etary prod­ucts.”

Adds an ad­vi­sor in On­tario with Toron­to­based As­sante Wealth Man­age­ment (Canada) Ltd.: “We have very good in­ter­nal prod­ucts that are well thought out, ex­e­cuted and sup­ported.”

Like­wise, on the in­de­pen­dent side, an ad­vi­sor in At­lantic Canada with Rich­mond Hill, Ont.-based Global Maxfin In­vest­ments Inc. says: “There is noth­ing I can’t do. If there is some­thing that’s not ap­proved, you send an email and the firm will ap­prove it.”

“There are so many com­pa­nies we’re aligned with now,” adds an ad­vi­sor in On­tario with Mis­sis­sauga, Ont.-based man­ag­ing gen­eral agency (MGA) IDC World­source In­surance Net­work Inc. “Back in the day, you were a cap­tive agent; now, you can find the best prod­uct.”

In fact, IDC WIN ad­vi­sors were so pleased with the range of prod­ucts the MGA of­fers that they gave the firm the high­est per­for­mance rat­ing (9.7) in the prod­uct of­fer­ing cat­e­gory in this year’s Re­port Card se­ries.

Re­peat­edly, IDC WIN ad­vi­sors boasted that they have ac­cess to any prod­uct they de­sire. For ex­am­ple, an IDC WIN ad­vi­sor in On­tario says: “The [firm] of­fers all the prod­ucts that I’d ex­pect it to of­fer. I can’t think of any prod­ucts I would want that [IDC WIN] doesn’t of­fer.”

In­no­va­tive prod­ucts lauded

Al­though firms, on the whole, re­ceived com­mend­able per­for­mance rat­ings in this cat­e­gory, the firms that stood above the rest had a prod­uct shelf that in­cludes the lat­est and most in­no­va­tive prod­ucts. Fur­ther­more, ad­vi­sors ex­pressed how im­por­tant their firms’ an­tic­i­pa­tion of the chang­ing needs of their clients is.

“We’re al­ways look­ing for new op­por­tu­ni­ties for clients. In my opin­ion, prod­uct of­fer­ing is the area that evolves the most — along with tech­nol­ogy,” says an ad­vi­sor in On­tario with Toronto-based RBC Do­min­ion Se­cu­ri­ties Inc.

“The [firm is] avant gardiste,” says an ad­vi­sor in Que­bec with Mon­treal-based Peak Fi­nan­cial Group. “[Peak is] al­ways ahead of the com­pe­ti­tion in prod­uct ac­ces­si­bil­ity, back of­fice and tech­nol­ogy.”

Adds an ad­vi­sor in On­tario with Toron­to­based Bank of Mon­treal (BMO): “I think we’re very in­no­va­tive at BMO. The [bank is] the first to bring [new prod­ucts to mar­ket] very fre­quently.”

In con­trast, ad­vi­sors who be­lieve their firms are out­paced by the com­pe­ti­tion and whose prod­uct shelves aren’t keep­ing up with the lat­est of­fer­ings gave their firms be­low-aver­age per­for­mance rat­ings in the cat­e­gory.

“The [firm is] a bit of a di­nosaur. [It’s] not quick to move on some things,” says an ad­vi­sor in At­lantic Canada with Win­nipeg­based Great-West Life As­sur­ance Co.’ s Gold Key dis­tri­bu­tion net­work. “Some of its in­vest­ment prod­ucts are get­ting bet­ter over time, but they’re hard to change at the drop of a hat.”

Adds an ad­vi­sor in Que­bec with Mon­treal-based Na­tional Bank of Canada: “We have work to do. We have to im­prove our prod­uct of­fer­ing a bit.”

An­other sore spot for some ad­vi­sors were prod­ucts that had higher than aver­age man­age­ment fees.

“The firm needs to stay in front of prod­uct de­vel­op­ment, and has to stay in front of costs,” says an ad­vi­sor in Bri­tish Co­lum­bia with Toronto-based TD Wealth Pri­vate In­vest­ment Ad­vice.

Adds an ad­vi­sor in At­lantic Canada with Mis­sis­sauga-based In­vest­ment Plan­ning Coun­sel Inc. (IPC): “I use third-party funds. I don’t like the prod­ucts [IPC] of­fers in terms of per­for­mance and costs.”

How­ever, ad­vi­sors need to look at the full pic­ture when look­ing at prod­ucts’ costs, says Kevin Hurl­burt, IPC’s ex­ec­u­tive vice pres­i­dent of prod­ucts and ser­vices: “When we’re look­ing at costs, we want to make sure that the con­ver­sa­tion is fo­cused on all of the value-added ser­vices that an ad­vi­sor and that firm can de­liver to an in­vestor, such as port­fo­lio con­struc­tion, as­set al­lo­ca­tion, re­bal­anc­ing and tax-over­lay man­age­ment.”

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