How Canada’s Top Women Wealth Advisors are chosen

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Determining which women wealth advisors stand out in what’s still a very male-dominated industry is not a task to be taken lightly.

That’s why SHOOK Research puts a priority on determining advisors’ quality by interviewing them in-person, virtually and by telephone, with deep due diligence as part of Canada’s Top Wealth Advisors series of rankings, published by The Globe and Mail. That includes the inaugural Canada’s Top Women Wealth Advisors ranking.

Unlike other advisor rankings, advisors are not ranked by how much money they bring in. Numbers such as production (revenue) and assets under management (AUM) don’t tell the whole story, especially when much of the data are self-reported.

The research team creates rankings of role models – advisors who lead the way in offering best practices and providing a high-quality experience for clients. A focus on both qualitative and quantitative factors is imperative.

How advisors are ranked

SHOOK has developed a proprietary algorithm of qualitative data to evaluate best practices. Some quantitative measures are also included in the algorithm. However, portfolio performance is not a criterion due to varying client objectives and lack of audited data.

Researchers scour the financial services industry for nominations and accept advisors who meet pre-determined minimum thresholds and acceptable compliance records.

Canadian advisors can complete a survey for consideration in the upcoming rankings. Neither The Globe and Mail nor SHOOK receives a fee in exchange for an advisor’s inclusion in the rankings.

To be considered for inclusion in any of Canada’s Top Women Wealth Advisors, Canada’s Top Wealth Advisors and Canada’s Top Wealth Advisors: Best-in-Province rankings, advisors must meet the following basic requirements:

• At least seven years as an advisor.
• Minimum of one year at the current firm, with exceptions such as acquisitions.
• Completion of an online survey.
• Business that is conducted with individuals is evaluated.
• Acceptable compliance record.

Here’s an in-depth look at the specific criteria that are considered part of the ranking process:

Quantitative metrics

• AUM and quality of those assets. Growth rates are considered.
• Client-related data, such as retention.

Qualitative metrics

• Telephone, virtual and in-person meetings with advisors (telephone interviews are required; if an in-person meeting cannot be accomplished, exceptions are considered in which the interview will occur after a ranking has been published).
• Compliance records and regulatory filings. Some “dings” can be overlooked such as firm or product failure beyond the scope of an advisor’s due diligence. The older a ding, if not consequential, the less we look. As there are many gray areas, the team is willing to listen to a firm that’s willing to stand behind the advisor with written support from leadership.
• Client “impact” is measured, which is a proprietary indicator that gauges the difference advisors make in the lives of their clients.
• Advisors who provide a full client experience including service model, investing process, fee structure, breadth of services, including extensive use of the firm’s platform and resources such as liabilities.
• Credentials (years of service can serve as a proxy).
• Use of team and team dynamics.
• Community involvement.
• Discussions with management, peers, and competing peers.

Compliance and regulatory issues

The following conditions will be considered to lessen the weighting of infractions:

• Those that are denied or closed with no enforcement action.
• Complaints arose from a product, service or advice initiated by a previous advisor or another member or former member of the team.
• Length of time since complaint.
• Complaints related to product failure are not related to investment advice, such as limited partnerships or adjusted-rate securities.
• Complaints that are proven to be meritless.
• Actions are taken because of a firm’s administrative error or failure.

Once an advisor’s compliance rating falls into a tenable category, the following conditions must be met:

• An advisor’s rating must be among SHOOK’s highest qualitative measures, including in-person interviews.
• Letters of recommendation from the firm must be submitted.

The ranking algorithm

The algorithm is designed to compare the business practices of a large group of advisors based fairly on quantitative and qualitative elements.

Data are weighted to ensure priorities are given to dynamics such as preferred “best practices,” business models, recent business activity, etc.

Each variable is graded and represents a certain value for each measured component. These data are fed into an algorithm that measures thousands of advisors against each other.

Disclosures

SHOOK is completely independent and objective and does not receive compensation from advisors, firms, the media, or any other source in exchange for placement on a ranking. The company is funded through conferences, publications, and research partners.

As every investor has unique needs, they must choose the right advisor for their own situation carefully and perform their own due diligence.

Rankings are based on the opinions of SHOOK and are not indicative of future performance or representative of any one client’s experience.

More information and complete details on the methodology can be found here.

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