In the October 2010 Insight Advisory Service report, we return to the topic of mutual fund distribution channels. Having examined the independent advisor channel in June, we now delve into the complex world of branch advice.
Branch advice—a channel that did not exist 20 years ago—has become a formidable player. The channel now employs over 13,000 advisors and houses more than one-tenth of Canadian households’ wealth and one-sixth of all mutual fund assets. In terms of size and scope alone, the branch advice channel is of strategic relevance throughout the funds industry. Dominated by the big banks, branch advice has served as the key linchpin in the banks’ emergence as a dominant player in the mutual funds arena.
Having taken much of the past decade to develop and refine their branch advice product and service propositions, the deposit-takers are not only competing amongst themselves, but also directly with the independent advisor channel that has been the mainstay of mutual fund distribution.
Our research shows that while all of the deposit-takers are targeting the same type of clients, there are as many models for serving those clients as there are offerings. The October Insight feature research article provides an aggregate look at the channel and examines the different service models from a number of vantage points: the role of advisors, the product shelf, advisor training, subject matter experts, and compensation.