Are you 'stuck between a rock and a hard place?'

Are big bank or brokerage firm advisors more restricted than independents? Some industry professionals think so.

Advisors working for the big banks and brokerage firms have their backs against the wall, according to one Toronto advisor.

Responding to a recent CBC Marketplace investigation – which reported that Canadian investors are receiving “inaccurate, misleading and inappropriate advice," particularly during RRSP season – Lynda Weinrib, investment funds advisor with Worldsource Financial Management, Inc., told WP that many advisors have no choice but to act as salespeople to keep their jobs.

“There is so much conniving out there,” she said. “There are very, very few people in this industry who are not trying to keep up with the Jones’; therefore they have to make the sales.”

Weinrib - who admitted leaving a dealership, herself, many years ago to avoid the "temptation" to sell - said that many dealers restrict their advisors to selling specific in-house products, while banning other fund-management products. A certain income must also be generated, or advisors risk losing their jobs, she said.

“The reality is, most dealerships or brokerage firms are really trying to get people to sell, trying to get people to bring more money in,” she said. “(Advisors) are stuck between a rock and hard place because they’ve got to put the roof over their heads, (keep up with) the mortgage payments, put food on the table for the kiddies and everything else.” (continued.)


John Cucchiella, head of retail for independent firm, Dundee Goodman Private Wealth (DGPW), also believes that bank advisors are more restricted than the independent advisor. In a recent interview with WP, he explained where he believes these advisors are headed.

“Advisors at bank-owned firms are getting to a point, from my own intelligence and the research that we’ve done, where they feel restricted on the business that they are able to do. It just becomes another notch of one of those push factors,” he said. “For us, being strong and being willing to support it, gives them a choice to move. Do I believe that advisors from banks will move? Absolutely. Do I feel that there is an opportunity and support, and the ability to give these guys an environment where they can participate just as well as where they are currently? Yes."

During last Friday's episode of CBC’s Marketplace, Show Me The Money, investigators caught a wide-range of advisors on camera – including those working for the five big banks and other firms. Some provided clear and sound advice, while others delivered misleading information on fees charged, returns projected (upwards of $20,000 a year!) and risk profile assessments.

According to Marketplace, the banks and firms featured on the television program were made aware of the investigation, but all declined to be interviewed, with only some promising to investigate the allegations further.