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Wealth Professional | 03 Dec 2013, 12:00 AM Agree 0
The head of Canada’s biggest independent firm suggests the industry is in for a significant culling of advisors. And could Toronto be hardest hit?
  • Martin | 20 Oct 2013, 02:37 PM Agree 0
    Bang on!
  • Ken | 21 Oct 2013, 09:13 AM Agree 0
    Agree 100%. Also, a professional designation & membership in a professional association should be mandatory. There are too many so called 'Financial Advisors' pushing a product only for the commission.
  • lawrence Turnbull | 22 Oct 2013, 03:16 PM Agree 0
    I think the victors in loss of advisors will be the seasoned veterans of the industry who understand the client and the markets and are committed to jumping through the regulatory hoops. If you are not, then you're out of here.
  • Maureen | 22 Oct 2013, 03:20 PM Agree 0
    I'm new to the business and I have already built a significant book on the basis of fee-only. I think that any cull in investor numbers will come from those advisors who can't show the value they bring to the investment process. Transparency will run out some of the old advisors.
  • Harley Lockhart, CFP, CLU, CH.F.C. | 25 Oct 2013, 03:52 PM Agree 0
    Let's not forget the industry does not exist just for advisors. Great care should be taken when making changes to anticipate and account for any negative implications for the clients. The average investment account for Canadians is around $70,000. Can someone with that level of assets afford to pay the level of fees an advisor needs to bring in to stay in business? Upper socioeconomic strata individuals don't have to worry but let's not callously throw out a compensation model that has worked well for over 100 years. Give the clients choice.
  • Niall | 28 Oct 2013, 11:51 AM Agree 0
    I somewhat agree with Harley. Fee Based advisors always believe they are better then commission based advisors. In many cases they cost the client even more money to do the same thing. I know commission advisors that became fee only advisors and instead of a 1% trailing commission they now charge a client a 1.25% fee instead. The client is worse off with the fee -based advisor in this case.
    I don't care either way, but it should be what the client wants, not what advisors want. A client should have the right to choose fee based or commission based, but a regulator has no business telling clients that they have no choice but to do Fee based only.
  • Niall | 28 Oct 2013, 11:58 AM Agree 0
    I agree, Regulators have no business telling clients their advisor has to be fee-based .
    In many cases clients are better off keeping the commission based system in place instead. I know commission based advisors that used to get 1% trailer fee and now they have gone fee based and they charge their clients 1.20% instead. The client ends up paying more instead of less. You never here this from the regulators. All you here is commission based advisors are bad. I think the client should not be told what they have to do. They can make up their own mind and decide to go fee based or commission based with their advisor.
  • Ken MacCoy, CHS | 28 Oct 2013, 01:52 PM Agree 0
    Right on Harley. I agree. - In respect to my original comment above, I have been an Advocis member for 22 years. Education is important not only for advisors, but also our clients with whom we deal and the regulators. With 35+ years in the insurance industry, I believe I have the experience & knowledge to handle my clients investments. However, I specialize in insurance products and have partnered with a CFP who has 40+ years experience with investments & retirement planning to ensure my clients have the best possible advice. Education for all, a written financial plan with an investment policy statement and full disclosure to our clients about how we are paid is the key.
  • Brian W. Leitch BA CLU ChFC CFP | 01 Nov 2013, 08:32 AM Agree 0
    I have worked in the finanical services industry for 42 years in many capacities from advisor to Director and back to advisor. I believe strongly that the financial services industry should require financial advisors to be accredited and professional. My concern is that the regulators seem to be more interested in their own agrandisement than structuring a working environment in which the client can expect professional guidance, expert advise and service from the advisor. Regulators should be concerned with ensuring the public gets valid professional advice. The public should decide on how and when they pay for that advise and what it is worth to them.
  • M.W. Schultz | 29 Nov 2013, 03:26 PM Agree 0
    Did we hear that MERs will also decrease, in order to benefit the client? There is a troubling trend, in the industry, to blame DSC rather than uncrupulous advisors and clients who cannot remember why their long-term investments should stay working through the various market cycles. The combination of shiftiness and ignorance have always been perfect partners. It is the incidence of retroactive "claimed ignorance" that has the regulators up in arms.

    So, what if the "regulatory" call for transparency happened to coincide with the suppliers' need to cut back their commission structure in order to compensate for mounting administration, insurance and regulatory costs (read: bank overhead) in a low interest rate market? Like all value-added reseller relationships, the manufacturers of insurance and wealth products will quickly learn that cutting out their VAR channels is a recipe for diminishing sales. The group-think must be that investment products have become commoditized and access to information ubiquitous, therefore products will sell themselves. Nothing could be further from the truth.

    Further, advisors who pretend that every client would prefer to reduce their in-going investment, by whatever fee the advisor has been able to "justify", are either too proud or misled.
  • Bob white, CLU | 02 Dec 2013, 07:54 PM Agree 0
    I like all the comments. 37 year in the business and past president of 3 LUAC ( now advocis) associations and rolls in management with large insures and advanced marketing, still practicing! Pracicing trying to do that little bit better for my clients. The regulators do not have the right percription for their glasses and have a narrow focus and what I feel is poor understanding as to what really needs to be done.

    We need guidlines and then Lots of education and knowledge and a proffessional body that the advisors have to be accountable to. Sake the stock broker type advisor, 4 times in the past yeR I have taken over accounts that the clients knew very little about fees and when they move the advisors tried to take 2% fees to sell the stocks, with some coaching the client had the fees reduced, that was for and 80 year old lady who the advisor had all her accounts in 100% resource stocks. She had never been advised about gains and loss planning. Yet these advisors will go on doing what they do, while a planner type advisor who earns income through trailing fees is penalized, even though the advisor is doing estate planning, tax planning, and maybe even help the organize tax returns and making sure beneficiaries are properly arranged, whithout a fee.

    If the regulators accomplish the plan they have, the average consumer will be significantly harmed. Canadians do not like to pay fees, as a finanicial planner i do both fee for service and trainer compensation. Fee for service only make sense for household account for $150,000 and over because the minimum fee that can be charged is $1,500. So for less than $150,000 I use front end zero for a 1% annual trailer, and I can do that because of asset base. The young advisor starting out can not do that, and there is no insurance company or dealer standing up to recruit and train and compensate an advisor so they can suceed financiallyuntil they can build a book to support them and all the fees and costs to run a business and provide the serve for clients to healp the. Build not just wealth, but a protection plan and an estate plan and all the dynamics that effect families and business on a day to day basis.

    Last week I looked at my client base and found that 45% of of my book of assets are accounts less than $25,000 and represents about 6% of annual revenue. That said there are multiple accounts for the same clients, but if that was not the case and I just said good by, you take up too much of my time, do you think the banks are going to provide the level of service we do, i think not!

    A proffessional advisor works based on ethics and princples. For example, if you look after a family and one of those members dies, you look after the claims, help and guide the family with CPP forms, employer claims and all the oth things that need to be done, and you did not even sell the policy. But the advisors that went before us did, and it is our job to do the right things, and with out compensation.

    More than any other time in our history, advisors need to stand up tall, and tell their clients what is going on, how it will effect them the client and the relationship with the advisor if the regulators do not get their heads out of there butts and see reality, and unterstand human behavior and how these changes will be so punative to the average Canadian and their financial plans, when 65% of Canadians do not have pensions and only 24% contibuted to RRSP's last year.

    Do not wait, keep informing your clients, as them to contact their MP's and any other goverment official they can. We need to create a perfect strom to sink the idea of being compensate the way it has been done for 100 plus years is a totaly bad thing. Our client know we get paid, ask them they are not stupid, but the authorities seem to think they are stupid and think they will protect them from themselves.

    Get involed, after 10 years of not being actively involed with Advocis, this month I have joined my local executive, because we need to do what ever we can to make a difference, and we will make a difference and be respected by Canadians for fighting for them.


  • philippe m martin | 03 Dec 2013, 07:52 AM Agree 0
    chop this ,chope that, buy this, buy that,,chop ,chop chop...I do belive strongly that CEO that cannot run a good daily brokearage without enhanced monitoring on agents or brokers ,should {first chop themself!!!} philippe m martin been chopped 100 times over by different legend in their own mind management!!!!! finance dept of canada
  • Cory Leflar, BA, CFP | 03 Dec 2013, 02:36 PM Agree 0
    I applaud the idea of elevating Financial Planning to the same level of professionalism as Law or Accountancy. A code of conduct and professional standards that are enforced are, I think a healthy foundation to build upon.

    However, it is not lost on me that those same standards increase costs. Advisors with larger practices will be able to absorb them, smaller ones...I don't know. Whether we end up as fee based or commission based doesn't really matter, so long as we are transparent, IMO.

    I think the article is correct that there will be less advisors going forward - and that isn't necessarily a bad thing. I would like to know how regulators envision us being able to help clients with lower net worth, but I don't see anything about that in their comments.
  • philippe m martin | 03 Dec 2013, 04:16 PM Agree 0
    elevate advisors, well, if you never did the roads of elevation in the field of helping dad and mom to invest, sos ,daughters in remote areas outside bay street and rene levesque in montreal. well you have the elevation provlem. advisors in large cities enjoy close road shows, current fund representation in offices , bur in the small towns,across canada rarelly. went you talk elevate higher standards, for wealth managment to estate planning brace yourself manulife have 1 lawyer accountant for quebec, and one in the maritimes. this field is so specialized, so expensive,its hard to keep up with the taxation change in investment or any other financial solutions, without going to these people for help, many companies do not have the specialist, had a rbc experience on family trust during a christmas period, and I had to refer to my books to help out that lawyer. elevate 50% of investment house or insurance companies have none of those services ,its to expensive, and the consuler will not pay the cost for independant sources,they just cannot afford them. 5% of the entire corporation world ,are able to pay for these services. wehter tax issues, estate issues, accounting some people call themself chattered accountant but it stops right there, do not talk about elevation toward estate truste wether private, coroporation ,they run for help, same with 90 % of the lawyers.... this is not a charity market ,we are providing to consumers ,its a need after we releaze that a problem need a solution. that is the role of an agent,broker, everyone as tactics, a bond fund manager feels ,he as a fantastic fund, well mange, same with a equity manager , or a global asset provider. different sector depending on the outlook of the economy and the hardship of different companies , looking for value and loking to make a profit with corporation that are in demand of the products they can provide,,,,,,elevate to what mesure , what variables, advocis canada negociates only in english to the dept of finance, what a tranperency. elevate and past the info to who. dear wealth providers, why are you capping funds left and right. this is an on going practice that should be investigated with all providers. who losses[consumers, who is in the field to advise them minny me the advisor.telling them they cannot contribute any more money in this fund and that fund... webt I say capping funds ,since the last 15 years minimum 15,000 funds and more. Now lets elevate advisors, again lets elevate the knowledge of understantion needs and provide solution to canadian consumers. and I doubt the boys at the dept of fince in canada , do not have a clue what this meeds, look at pension plans across this country...real shame , who,s fault [You &Me] letter actuaries playing the mortality tables, pension providers or self administration carriers not looking ahead of the last 5 years of earnings ,without the actual cost. creating elevated actuarial deficit to those plans, example in the year 1984 benefit canada magasine came out and had a 4 page analysis for the piblic service pension plans in new brunswick, you know what happen, the goverment was depositing the contribution in the operating account of the gorverment keeping the funds to build hospital and day to day expense, they actually stole these employees. the amount 3 billions dollards . in those days some of that 3 billion would have been invested in 30 year federal bonds at 19.35 % for 30 years ...take the interesr divede by 72 ,will show you rule 72 of growth. Now they are introducing share risk pension, the invention of the year 2013, what a crap! or is it called levation, yea elevate to its pinnacle acievement. my name is philiippe m martin ,I am tired of all this bull!!!
  • Barry D. | 04 Dec 2013, 10:00 AM Agree 0
    Amen Phillippe
  • philippe m martin | 05 Dec 2013, 10:30 AM Agree 0
    lets have politicians on fee basis, base on ideas they can bring to law in parlement, lets have the public service on hourly .pensions, on productivity and achievement toward a positive run dept ,he works in, apply the same to all provinces mla fee basis only in the new dimension for 2014. philippe m martin
  • Ken MacCoy, CHS | 05 Dec 2013, 11:24 AM Agree 0
    Excellent idea. I like how this man thinks.

  • philippe m martin | 05 Dec 2013, 12:35 PM Agree 0
    No more, scotia mcleod, harris, bmo, rbc, cibc,national banks, any licensed bank in canada, credit unions,and caisse populaire ,from now own everyone in the back on commissions basis only,no more quarantee salary plus bonus & expenses, no more in house employee selling from the bank or caisse populaire ,credit union offices calling themsself financial advisor, inveswtment advisor with there establishment saying sell the bank brand products,or caisse populaire pushing certain line..none of them offer the large comprehensive fund choices that an advisor that contracts on commission only to solutions. reL SHAME TO THE INDUSTRY, LET THEM WORK ON COMMISSION ,NO MORE INHOUSE FREE BEES. dear bak CEO ,time for more profit, tell down to your investment employyes to work as independants no salaries. and see how elevated ,they will perform.fair came to fee for service advisors,and commission advisors.At least we know how much products are available out on the market. because we are free to use the perfect solution for our clients. this should be like the constitution of canada. lets elevate to a higher level, remeber BreX, bank of montreal advisor faxing clients buy more , one of our VP saw the operation ,they found bullions more....the client lost 500,000 on this fax. but its okay. nortel chairman walks out of nortel building 5:30pm question from reporter , ARE YOU HAPPY YOUR STOCK IS SO HIGH ON THE EXCHANGE, HIS RESPONSE{IT GOES UP AND IT GOES DOWN,HE KNEW RIGHT THERE HE HAD NO POINT OF QUARANTEE LEVERAGE ON THE PRODUCT. THEN IT FELL..WHO LOST...QUEST?....AT THIS POINT i LOOKED AT AGF MUTUAL FUNDS HOLDING ,EVERY BREX WAS DELETED FROM ALL THE FUNDS THEY CARRIED. ....ENRON, PLAIN AS NIGHT, POLITICAL GATHERING ,YOU WOULD SEE THAT CEO BESIDE PRESIDENT BUSH AND ANY OTHERS, MANULIFE, CANADA LIFE LOST 350 MILLIONS IN CORPORATE BONDS . BY THE WAY THOSE ADVISOR M SENIOR MANAGEMENT INVESTMENT SPECIALIST HIGHLY QUALIFIED DID NOT KNOW BETTER, REMEMBER PRESIDENT REAGAN AND BRIAN MULRONEY BEFORE THE NAFTA AGREEMENT [ORONGE COUNTY CALIFORNIA bankrupt 60 BILLION , THAN THEY PUT ALL BANKS IN THE BLACK AND THEN SGN THE NAFTA AGREEMENT. SURELLY THEY ALL USED FEE BASIS ADVISORS OR CONSULTANTS.DEFINED BENEFIT PENSION PLAN, THEY NEW THAT ANY DEFINED PENSION PLAN WITH A LAST 5 YEAR OF EARNING WAS AN ACTURIAL DEFICIT FROM THE START. ALSO FEE FOR SERVICES CONSULTANT HOUSES. LITTTLE MINY ME WILL CONTINUE SELLING ON COMMISSION BASIS, AND SURELLY WILL PROVIDE A SOUND ADVICE TO MY CLIENTS.PHILIPPE M MARTIN
  • Marc | 05 Dec 2013, 05:41 PM Agree 0
    Everybody forgets that people invest to MAKE MONEY. All these talks about regulatory changes are just noise. The regulators are just showing they are doing their job, nothing more. Where were they before the 2008 financial crisis? Let the clients choose! A 100% fee-based regime is not good for clients as the fee-only advisors will not work harder to find better deals for their clients. They get paid even if they spend their days in bars and golf courses. Otherwise, the regulators should also impose fee-only mandate to discount brokers and even retail bank sales channels.
  • Marc | 08 Dec 2013, 05:23 PM Agree 0
    Philippie M Martin has so much bitterness in life. He should also include that from now on, no more pre-priced airline tickets, just pay as you board. Your generalization coupled with your grammatical error-riddled diatribe shows your low level of investment knowledge and perhaps wanton greed that caused you to loose money in the first place. You probably invested 50% Bre-X and 50% Nortel and for what rationale? Know what you are buying. If you don't understand anything and cannot take any risk, just stash your few thousands under your mattress. The only investment you should have/make is a burglar-alarm system to wake you up at night...just in case.
  • philippe m martin | 09 Dec 2013, 09:45 AM Agree 0
    my dear buddy marc, philippe m martin did not invest in brex or phil
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