Most advisors in hybrid channels are salaried and work as part of a team.Hispanolistic/iStockPhoto / Getty Images
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Canadian wealth management firms are beginning to adopt hybrid advice models that mix a digital-first client experience with some human advice to serve younger clients or those with less complex financial needs. Firms using these models are taking various approaches to career development and progression for the advisors staffing the programs.
Sun Life Financial Inc. launched its Prospr hybrid advice model in 2022, a digital platform supported by a team of almost 100 advisors. Rowena Chan, president of Sun Life Financial Distributors (Canada) Inc. and senior vice-president of retail advice and solutions, says Prospr has been an effective training ground for early-career advisors, though they aren’t the only ones drawn to working for the channel.
“We tend to attract advisors earlier in their career, and they can benefit from a team-based approach where they can develop and grow,” she says, noting many advisors appreciate the income stability early in their careers. Prospr advisors are salaried employees of Sun Life and also participate in an incentive plan with performance factors, including client experience and team success.
“But at the same time, we also attract experienced advisors who want to be in an employee-based environment or a team-based environment,” she says. “Regardless of the advisor’s chosen career path, we have the options for them to stay on, become a specialist, or move to our dedicated face-to-face channel.”
Prospr clients – who Ms. Chan says skew millennial and generation Z and tend to be starting a family, buying a home and insurance – have access to the digital platform and can speak with advisors through phone or video calls for planning needs.
Advisors must be mutual fund- and insurance-licensed, Ms. Chan says. Prospr also has some advisors with certified financial planner (CFP) designations who can support clients with more complex needs.
Because Prospr is “team-based,” Ms. Chan says clients who call in may speak with a different advisor every time. The firm’s customer relationship management software ensures advisors don’t have to start the conversation from scratch.
The team approach means advisors don’t develop their own books of business within Prospr, Ms. Chan says. If they decide to become self-employed advisors within the firm, Sun Life has a separate training program and Prospr advisors can join a “feeder pool” for advisors interested in growing their practices.
The Bank of Montreal has a hybrid advice offering for self-directed investors through its BMO InvestorLine platform, called adviceDirect. The program is available to clients with at least a $10,000 balance; adviceDirect premium, which has wealth planning services, is reserved for clients with $500,000 or more in assets, and gives them access to financial planners who can help them with retirement, education, estate, tax, insurance and other needs.
Silvio Stroescu, president of BMO InvestorLine and head of BMO Wealth Management digital first, says the bank launched the channel after seeing InvestorLine clients calling in to ask about trades and agents being unable to provide investment advice.
Mr. Stroescu says adviceDirect advisors typically start as agents with InvestorLine. The bank has also hired previous investment advisors into adviceDirect roles.
Advisors with the channel must be securities-licensed, and Mr. Stroescu says the bulk of their compensation is salary-based (though, as with other agent-type roles, there’s a component based on advisors’ net promoter score, introducing clients to more services and completing financial plans).
He estimates roughly 15 to 20 per cent of adviceDirect advisors become full-service investment advisors with the bank.
“We do have advisors at adviceDirect who choose to become an investment advisor and see this as a stepping stone. Then there’s some who just love that model … people who love the flexibility of engaging with clients by video.”
However, Mr. Stroescu notes, there isn’t an opportunity for advisors to convert clients from adviceDirect to working exclusively with them outside of the platform.
Wealthsimple has employed a hybrid model for clients in its managed portfolios since its early days, says Zoe Wolpert, a senior advisor at the Toronto-based fintech who leads teams that support its highest-income clients.
Wealthsimple has three client tiers: core clients have access to the main robo-advisor platform; premium clients with at least $100,000 in assets are able to book financial check-ins with one of the company’s advisors; and “generation” clients with more than $500,000 in assets gain access to financial planning with a dedicated advisor. Clients who work with an advisor have the same person every time and are matched based on their life stage and needs.
Wealthsimple advisors must meet portfolio manager licensing requirements, including their chartered financial analyst (CFA) and chartered investment manager (CIM) designations. Financial planners must have their CFP designation.
While the company’s advisors are salaried and not building their own book of business, Ms. Wolpert says the hybrid approach is attracting advisors who appreciate the opportunity to dedicate more of their time to financial planning and advice.
Some advisors are starting their careers while others are mid-career, she says, and want a different structure and to serve clients “in a tech-enabled way.”
She notes the robo-advisor platform removes some administrative tasks from advisors’ plates, including onboarding, account opening and portfolio rebalancing, and the firm’s advisor team spends 80 per cent of their time on “high-value” client interactions.
Ms. Wolpert says technology has also allowed the firm to scale its advisor services. Wealthsimple has begun testing how to offer financial planning support to premium and generation clients who invest through its self-directed platform.
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