Turning the tide, in this month’s Advisor’s Edge

(September 10, 2004) It was only a matter of time before the banks took steps to stem the flow of top producers heading out their doors. But how do they counter the allure of the boutiques? That’s the question tackled in the September issue of Advisor’s Edge.

“Our cover story is called ‘Half Empty’ and it’s a follow-up on a story we ran in February called ‘Boutiquing Past the Banks’,” says Deanne Gage, the magazine’s managing editor. “That story looked at why some investment advisors weren’t happy in the bank environment and why they were leaving for boutiques. ‘Half Empty’ tells the story from the bank’s point of view; why people are staying in the bank environment.”

That’s not to say the banks are without their problems. Staff retention has been a problem for the banks recently, so now they are fighting back, working on incentives to keep their top performers. They are currently working to improve the payout and bonus structure, for example.

“When you lose your superstars, that’s when you have problems,” says Gage. “It’s not about quantity, it’s about quality.”

One advisor left his practice at RBC for a boutique only to turn around and return to the bank. He managed to maintain a high percentage of his clients during each move, with client trust in the bank playing a big role in retention.

“You have to weigh all the pros and cons, because leaving is a hassle,” Gage says. “It really has to be something special to make advisors want to leave. They’re thinking beyond the money. They’re thinking about the location of the office and the more flexible hours.

“The ones that remain, might be moved either way, they might be mulling their options right now. It might be a case of ‘the grass is always greener’,” she says.

In a feature entitled “Farm Aid,” this month’s Advisor’s Edge also looks at the challenges facing advisors with a largely agricultural clientele.

Never mind the country bumpkin stereotypes; today’s farmers are financially savvy and looking for expert advice. The challenge is accepting their financial assets are largely tied to the land, making product less important than planning.

This month’s “Toolbox” features tips on planned giving, explaining a range of options for making sizeable charitable donations and the different tax-treatments each receives.

In the compliance department, this month’s magazine offers the warning, “Beware the Beneficiary Designation.”

“This story looks at what can happen if you don’t have beneficiaries or if you do have beneficiaries, how easy it is for a client to find themselves in court,” says Gage.

Written by tax and estate planning guru Jamie Golombek, the article presents three real-life case studies — one without a named beneficiary, two with one — where the results did not turn out the way the client wanted. Golombek explains how to avoid these pitfalls.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com