What does excellence in financial advice look like? The answer is important for both investors and the investment industry alike.
For investors, how can they determine quality when they’re searching for a trusted advisor to manage their life savings and provide much-needed guidance on matters such as retirement planning, taxes, life and living benefits insurance coverage, or estate planning?
Investors take a leap of faith when they receive referrals from friends or family or go to an institution with which they’ve conducted business over the years. How can they know how the advisor they’ve chosen truly measures up?
For the industry, a benchmark is necessary for advisors across the board to see what makes for a best-in-class advisor – and what they need to do to live up to that level of service. Advisors need examples to hold themselves against and to drive the profession further.
Yet, there has been no widely available way for investors or the investment industry to see what excellence in financial advice looks like in this country. That’s why the Globe and Mail has launched Canada’s Top Wealth Advisors, a new annual listing that will shine a light on the nation’s most effective and successful financial advisors.
The list will be published in the November issue of Report on Business magazine as well as online in late October. Industry-specific coverage will also be published on Globe Advisor at that time and throughout the following year.
Advisors who make the inaugural listing will be invited to attend Canada’s Top Wealth Advisor Summit, an exclusive event meant to forge connections and celebrate excellence in this space. It is scheduled for Nov. 8 at The Globe and Mail Centre in Toronto.
“Choosing a financial advisor can be difficult for investors who are looking for personalized service combined with industry expertise. This new ranking will help Canadians understand what excellence looks like in this field,” says Garth Thomas, managing director, business and financial products, at The Globe. “Furthermore, following the relaunch of Globe Advisor, our one-stop-shop for financial advisors, two years ago, this new program is another demonstration of our continuing commitment to the investment and financial advice industry – and in helping advisors succeed.”
To produce the list, The Globe has partnered with Shook Research, which runs America’s Top Wealth Advisors for Forbes.
What sets Shook Research’s proprietary methodology apart is that unlike other organizations around the world, which base their listings exclusively on a formula that considers advisors’ client assets under management and annual level of revenue, there is a significant focus on the quality of the advice advisors provide.
Although advisors do have to meet minimum thresholds of financial metrics, factors such as advisors’ experience, tenure with their current firms and compliance records are also taken into account. Furthermore, there’s a significant level of due diligence that takes place.
Financial services firms must nominate their advisors, and those firms verify that the information advisors provide is accurate throughout the process. Once advisors are nominated, they’ll complete a thorough survey on Shook Research’s website. The organization will then conduct in-depth telephone calls, virtual meetings and in-person meetings (during more normal times) to find out more about how advisors run their practices and provide a high-quality experience for their clients that incorporates a breadth of services.
“We have a process our research analysts follow that we call ‘Shook Impact,’” says R.J. Shook, founder and president of Shook Research. “Advisors have a pretty big responsibility. Clients and their families are entrusting their advisors with their wealth and even their health. So, our research analysts ask themselves, ‘Is this someone I would recommend to a family or a friend?’ every time they speak with an advisor. Ultimately, we believe advisors should be measured on the impact they have on clients’ lives.”
Once the interviews are conducted and scores are assigned to advisors’ answers, Shook Research will run all the data obtained from each advisor through a ranking algorithm that weighs both quantitative and qualitative criteria.
Throughout the past autumn, a team from The Globe and Mail and Shook Research that included Mr. Thomas, Pablo Fuchs, Globe Advisor editor, Mr. Shook and Callie Almes, senior analyst at Shook Research, met with senior wealth management executives at bank-owned and independent investment dealers as well as full-service investment and mutual fund dealers. The support among leadership for this new listing was resounding.
To make the process more collaborative and obtain consistent input from the industry, executives were invited to join an advisory group. Thus far, around 20 have signed up to help with the process.
Jonathan Durocher, president of National Bank Financial Wealth Management in Montreal, was among the first executives to join the group and lend his support to this initiative, which he believes will have a positive long-term impact among both investors and the investment industry.
“This new listing is a win-win for everyone. It’s good for investors because they get an evidence-based [analysis] of [an advisor’s] practice, which is not easy to do in the wealth management space, and it’s also good for our industry because you’ll have advisors constantly pushing to improve their value proposition,” he says.
The Globe and Shook Research have opened up nominations. An initial deadline to complete the application has been set for Jan. 27. Some later deadlines may be accommodated on a case-by-case basis. Instructions on how to apply are available here.