Dealers candid about tough issues facing industry in May’s Advisor’s Edge

(May 6, 2003) For those looking for a different perspective on the issues facing dealer firms and the industry as a whole, the May issue of Advisor’s Edge features insights from the heads of four leading Canadian dealer firms — views that are anything but sugar-coated, according to the magazine’s managing editor.

“What impressed me about this story is that all four [of the dealer execs] were particularly candid and they didn’t skirt the tough issues — especially the rising costs and fees that advisors are facing right now,” says Deanne Gage, managing editor of Advisor’s Edge.

In the article “View From the Top” on page 18 of the magazine, the dealer execs were asked why firms are downloading some expenses to the advisor level. “It’s not that costs are being downloaded to the advisors, it’s just that there are costs that never existed before: regulatory costs, errors and omissions insurance, MFDA costs,” explains Chris Reynolds, president of the Investment Planning Counsel of Canada. “Unfortunately, the pay grids don’t allow the dealer to absorb them. There are not enough margins to do that and stay in business.”

The article also covers — among other topics — each dealer exec’s take on the biggest issue facing dealers today: how their firms are retaining advisors and whether or not in-house product quotas exist. “We do not have differential commissions, quotas or financial incentives,” responds Assante’s president, CEO and chair Marty Weinberg. “An advisor should focus on the client’s best interests and quotas work contrary to that concept.”

Switching gears to actionable marketing ideas, May’s Advisor’s Edge also features a look at some innovative and creative strategies three advisors used to win over new clients. “Prospecting is something we haven’t covered enough of in Advisor’s Edge and I think people are looking for fresh ways to do it. In this tough environment, cold calling and seminars aren’t going to work anymore,” says Gage.

Among other magazine highlights, Gage points to the “Mystical money” article on page 13, which looks at insurance strategies that can create “free” money for charitable giving.

Filed by John Craig, Advisor.ca, jcraig@advisor.ca.