IQON advisors anxious about Assante

(April 30, 2004) CI Fund Management’s acquisition of IQON Financial is causing anxiety among some IQON advisors, who worry about their new affiliation with Assante.

CI announced yesterday it had purchased both IQON and Synera Financial from Sun Life Financial for $38.5 million, adding 570 advisors to the CI family. CI bought Assante and its 1,000-strong advisor force last year.

Under previous CEO Martin Weinberg, Assante faced criticism from advisors over perceived problems with its back office and dissatisfaction over payout grids.

Weinberg left when CI bought Assante, and was replaced by Joe Canavan, formerly of Synergy, another of CI’s acquisitions. But the jury’s still out on whether Canavan can advance Assante’s reputation in the industry.

“We need to find out whether Assante has improved since the CI acquisition,” wrote one IQON advisor in Advisor.ca’s Talvest Town Hall.

“IQON has a great system, Assante is an unknown,” said Barry Dennis of Dennis Financial in Fredericton in an interview.

Ian Whiting of Ad Astra Financial Planning in Burnaby, B.C., notes that a number of Assante advisors switched to IQON in recent months, citing excessive technology fees charged by Assante and “heavy-handed” management.

In a conference call today, IQON advisors were told that Assante technology will be made available to IQON advisors “as requested” and that IQON advisors would not be forced to sell Assante products or use the firm’s services, Whiting says.

There’s also concern about the possible disappearance of the IQON name. Although Canavan said yesterday that IQON and Synera will continue to operate as independent businesses — and repeated that pledge today in the conference call — there are still question marks about Assante’s long-term plans for the new acquisitions.

“The intention is to merge IQON and Synera into Assante [but] the integration is not expected to begin until 2005,” said IQON president Todd Hynes in a memo to advisors obtained by Advisor.ca. “We will all experience an unavoidable period of uncertainty until the final integration plans are complete some months from now,” the memo continued.

Several advisors have suggested that if the ultimate plan is to merge the three firms, the IQON name would be a good choice for the new entity.

However, that scenario seems unlikely, considering the extensive branding campaign Assante has embarked on over the past four years.

In 2000, Assante purchased 16 smaller planning firms, including Brightside Financial Services, Fenlon Financial, and FPC Investments, spending an estimated $23 million on a re-branding and integration strategy.

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Despite the Assante concerns, some advisors are pleased with the buyout, with a few reservations. “I think it’s a good thing, but there will be costs involved and hopefully that will be recognized,” says Dennis.

“We incur significant costs every time a change happens, such as business cards, Web sites and print material,” he notes.

Lyle Harvey of Oracle Financial Services in Terrace, B.C., also sees some positives in the CI buyout. “I believe that Assante is a good firm and would be able to provide a wider range of products and services than IQON,” he says.

But Harvey is concerned about the logistics of changing software and procedures and retraining staff “to do business the Assante way.”

“Hopefully someone is going to pick up our costs for yet another change that we have no control over,” Harvey says.

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Join the Assante-IQON conversation already underway in the Talvest Town Hall on Advisor.ca.

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

(04/30/04)

Doug Watt