Designations matter, ADVISOR Group survey suggests

(October 7, 2004) Designations make a difference, particularly when it comes to advisor income. That’s one of the many findings of the ADVISOR Group’s third Annual Dollars & Sense Survey, featured in the October editions of Advisor’s Edge and Objectif Conseiller, with additional articles and tools online on Advisor.ca.

Advisors’ personal annual income averaged $91,406 in 2003, the survey found. However, those with designations outperformed the average. For instance, advisors with the FCSI designation topped the list with an annual salary of $171,388 and those with the CIM earned an average of $153,909. Advisors with the CFP also beat the national average, at $94,345.

Two-thirds of those surveyed said they had a designation. Of those, 53% had the CFP, by far the most popular mark (the CLU was a distant second at 12%).

The survey also found that advisors on the IDA platform made more, on average, than MFDA advisors ($115,789 for IDA compared to $81,310 for MFDA).

Clients are more aware of investment options and are looking for more product depth, says Russell Lazaruk of Scotia McLeod in Victoria. “Without a securities licence you offer clients limited service,” he explains. “If you don’t have all the tools in your toolbox, then you may be using something that’s not the best solution for the client’s situation.”

“We can sell a whole range of securities, including mutual funds, so simply the fact that you have more products on your shelf gives you a greater opportunity for solving client problems,” adds David Chalmers, a financial advisor with Rogers Group Financial in Vancouver.

The survey revealed that 60% of advisors work with firms that are MFDA-registered, while 32% were on the IDA side.

Advisors are paid in a number of different ways. But when asked which option best describes how they were compensated in 2003, 59% chose commission. Sixteen per cent were paid a salary plus bonus, while 14% received fee and commission. Three per cent were paid a base salary and 3% were fee-only.

Of course, there’s much more in our annual survey, including information about average number of clients, assets under management, asset allocation and investment recommendations. For more in-depth coverage and analysis, click on any or all of the related articles in this article, and be sure to check out the October editions of Advisor’s Edge and Objectif Conseiller.

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The third Annual Dollars & Sense Survey was conducted among a representative sample of 3,034 of Canada’s financial advisors between June 21 and August 2, 2004. The margin of error for a project this size is plus or minus 1.7%, 19 times out of 20. For half-sample questions the margin of error is plus or minus 2.4%, 19 times out of 20. A 12% response rate was obtained.

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Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

(10/07/04)