Monday Musings

Greetings LinkedIn,

I've been toying with the idea of doing a weekly post every monday talking about one of the topics that I work on here at Queenston. I feel like the kind of knowledge that I've amassed working the wonderful field of headhunting and M&A in financial services has lead me to be some sort of ultimate generalist about the industry, and I also feel that perhaps there are people out there that might be interested in learning more, or even engaging in conversation with me and others about these things.

So this is the first of these posts, we'll see how it goes. If you have something you want me to opine on, chime in the comments and I'll see about making time for it !

For the first few posts, I believe it would be most appropriate for me to touch about the 6 different metrics I use to evaluate how competitive a dealership is with another when recommending a banner vs another when an advisors trusts me to negotiate their deal with a new dealership.

Those 6 metrics are:

Access

Compensation

Administrative Support

Compliance Support

Brand

Technology (And how much it costs)

Today, I'm going to talk about Access

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So what does it mean to have access? To me, the essence of being a broker is being able to cast a wide net on behalf of your client, and to bring them, out of all the offers there are out there, the best ones for their own personal situation. Whether you are an insurance advisor that reaches out to the difference insurers in the market, or an investment advisor getting the best products there are right now, it is almost impossible to do that if your dealership is not allowing you access to those products.

After all, if someone comes to you and needs a simple Temporary 20 years insurance coverage, and you only have 4 insurers, you're invariably exposing yourself to not being able to provide them the best product. Maybe your 4 insurers are really good and one of them HAS the best product, but you're reaaaally reducing your odds by not having more access.

On the investment side, the active investing vs passive investing debate is still current and worth having. If you want to know more about the importance of access in investment products I strongly encourage you to read the Spiva Report: https://www.spglobal.com/spdji/en/research-insights/spiva/#canada or if you're feeling more humorous and light hearted, John Oliver's hilarious take on it here: https://www.youtube.com/watch?v=gvZSpET11ZY.

Now back when I was a fledgling financial advisor, I did my research into what would be best for how I viewed my client's financial well being and I ended up siding with the macro data that said that passive investing with a fee based model would be the more adequate way to manage their assets. However, when I went to the investment specialist and asked him which of our available funds could be passive products, he said that we did not currently carry any of those products, which would be ETF's. He told me that if I passed my IIROC license, I could potentially have access to 4 of these ETF's, but I would not be paid on these.

It was mind boggling to me that, as someone who counseled my clients in how to invest their money, out of the hundred's of funds available at our trading desk, NONE of them could give my clients what I had identified as the gold standard I wanted to run my practice with.

I'm not gonna lie to you... that was one of the major factors that caused me to leave that dealership.

And this is only my opinion as someone who at that time had barely 2 years in the industry and knew absolutely nothing about investments, compared to what I know now ( And mind you, I don't think I know that much now !)

And this is the same thing across the market. REIT's are widely considered to be much better than mortgage funds or real estate funds, managed products grant a higher standard of fiduciary responsibility, single securities position are a real good way to save fees for your clients, there are a thousand examples where having access to the correct product can make the difference between providing a proper service to your client or not, or even the difference between keeping a client or not !

And so when I evaluate a dealership I ask myself, and I ask the advisor I'm working with, what level of access is important to you ? Do you want your dealership to have an EMD license? To have access to managed products? How many insurers does their MGA have contracts with? How many mutual funds are approved by their investment committee? How many securities do you have data on?

Those are really important questions to ask yourself, and to ask your clients as well. There is NOTHING wrong with a financial planning focused practiced deferring to managed products for the investment part of their portfolio. Part of good service is learning where your limitations are. But if you fancy yourself an investment advisor, or an insurance broker, you need to be with a dealership that provides you with the level of access you, and your clients, deserve.

And on this note, I'll conclude the first of these monday word salads. If you're not sure about how much your dealership is helping you access-wise, or even if you've never asked yourself the access question, reach out, let's grab coffee (in person or virtual) and let's discuss if your current platform is the best it could be.

Have a great week, and leave a comment if you want to !