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Title: Facing Canada's new financial regulations and the widening advice gap
Author: Yeomans, K.
ISNI:       0000 0004 6422 7837
Awarding Body: University of Liverpool
Current Institution: University of Liverpool
Date of Award: 2017
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This research is the first organisational case study conducted on a Canadian Financial Service Industry (CFSI) organisation faced with the widening advice gap stemming from the new financial regulations. The advice gap is an industry term used to refer to those investors who do not obtain financial advice from a financial advisor, because their investment account is too small or because they are unwilling to pay fees for advice. The aim of the research is to provide evidence to facilitate the development of options for financial advisors, at various stages in their career, to assist them with adjusting to the new regulations, thereby reducing the advice gap. A single case study methodology was used to examine the impact of the regulations in a real-organisational setting. The objectives were to interview advisors, clients, and executives of the organisation being studied (XYZ), and other external stakeholders to obtain their perspectives concerning the regulations as they relate to the advice gap. Themes were derived from the interviews, facilitating the development of an e-mail survey questionnaire sent to the entire population of XYZ advisors. The survey data was analysed using regression on the age and tenure of advisors, as well as statistical to obtain qualitative and quantitative data. From the interviews and survey data, evidence was provided which facilitated the development of advisor options for reducing the advice gap, based on the age and tenure of the advisor and whether they worked as a sole practitioner or as part of a team-based practice, allowing them to select the options relevant to their situation. The executive team was presented with these options and interviewed again, allowing for additional feedback that would assist with moving the research into practice. Advisor options were: using Robo-advisor technology, the use of asset allocation in developing portfolios, collaboration within the entire organisation, client segmentation, online meetings, team-based practices, hiring a junior advisor, and the use XYZ’s National Accounts Team. Executive options were: improving XYZ’s fee-based platform, expanding and improving the National Accounts Team, continuing to explore and develop Robo-technology, improving entrepreneurial collaboration, providing advisors with asset-allocation tools, and improving support for advisors considering the move to a team-based practice. The ageing advisor demographics and the largest intergeneration wealth transfer that will take place in Canada make the investors with a small investment account (ISIA) relevant for advisor consideration. This segment will, through their personal accumulation or inheritance, become the large investment accounts in the future. The literature review examines similar regulations enacted in other countries. It also explores how Complex Adaptive Systems theory can assist the organisation with adapting to the new financial regulations. Given the entrepreneurial spirit of XYZ, the theory of intrapreneurship was examined, providing insights to develop creative and innovative solutions to address the advice gap. Technology was examined as it is disrupting the CFSI. This research will benefit members of the CFSI by reducing the advice gap and can provide insights to those in other countries facing similar regulatory changes.
Supervisor: Feighery, W. Sponsor: Not available
Qualification Name: Thesis (D.B.A.) Qualification Level: Doctoral