Portfolio Managers & Investment Counsellors of Canada Unite!

With record numbers of advisors exiting bank owned dealers; Banks are desperately resorting to
waiving management fees (for an entire year) to prevent Advisors from leaving with their clients.
Indeed, this is just another attempt to separate the client from his / her trusted Advisor.

It paints a grim picture of how Bank Dealers aggressively try to stem the tide and wrestle clients
away from the Advisor to the Bank. (it hasn’t worked-scores of advisors continue leaving every
week).

Now, the Investment Counsellor is next on the Bank’s hit list: Portfolio Managers are being laid off
for ‘cost savings’ and ‘efficiencies’. It’s already happening. Once again, It’s about profit margins.

With Portfolio Managers simply managing model portfolios, the simplicity of the models along with
the ‘substantial incomes’ Investment Counsellors earn, have made them the primary target for
elimination.

Investment Counsellors with large client books are in greatest danger. They are the main intended
target. And it’s not hard to see why: The larger the Advisor’s book of business, the greater the risk
of layoff: Banks view them as over-priced individuals who negatively impact the profit margins of
the Private Counsel business. i.e, the Investment Counsellors are earning too much income, but
the Banks are not earning enough. Indeed, with Banks reporting consecutive record quarterly
earnings/profits, exactly how much is enough?

Layoffs have already begun this past spring. With Bank fiscal year fast approaching (and to avoid
certain government required reporting), there will be more casualties coming this year and next.

For the bank, just like branch retail services, the days of rewards for performance, personal
relationships, loyalty and plain common sense have long gone.

With systemic conflict of interests and integrity failures, in the broker dealer market; the traditional
system is irrevocably broken. Advisors have already lost all confidence: Indeed, it is a crisis of no
confidence. Just like the Investment Advisor before him, the Investment Counsellor too, has lost
confidence in the Bank’s ability to play by a fair set of rules. This marks the end of any institutional
fairness and integrity.

In society and in business, its members expect institutions to abide by rules and not change them
at will. We live in a rules – based society: It applies to everyone. Individuals and institutions alike.

This means the Banks don’t get to break them when they don’t like the outcomes. (ie, the PM is
earning greater incomes with the bank’s own commission plan) When Banks break rules that
govern fairness and the rules of play, both employee and investor confidence in these institutions
are forever lost. The trust is irrevocably broken.

For the Private Client business, the Bank has engaged in a familiar pattern of perpetual cost
cutting and layoffs to achieve never ending margins and analyst shareholder ‘expectations’.

For Client facing Portfolio Managers, the banks have created a set of rules where the participating
Portfolio Manager is in a heads or tails losing scenario: If the PM generates insufficient revenues,
he will be laid off. And if he manages substantial revenues, he / she is now the prime target for
layoff. The Portfolio Manager has no way out. He / She is in a game they cannot win. So why
participate?

For over 20 years, Advisors-Portfolio Managers have been moving to independent dealers: The
evidence is written across every independent dealer website – along with the names of
every former Bank Advisor/PM.: This is living proof that despite bank hype about ‘brand’ –
clients have followed their trusted advisor to his chosen dealer: It demonstrates the client’s
preferred loyalty to his advisor no matter where he operates. Contrary to Bank mythology, it
proves Relationships prevail over brand.

Independent Dealers & Private Money Managers embody a uniform set of rules that don’t change.
Rules that remain firm and fair to all participants. Indeed, this fairness is recognized by right of
ownership. This is enshrined in the contract. Indeed, while the Bank insists they be an
individuals of (limited) income, only the independent dealer allows Portfolio Managers to
be true men/women of capital!

For the Advisor / Portfolio Manager making the transition – it is the independent dealer & money
manager who stands tall.

Rules & Fair Play are the essential mechanisms for public confidence in a fair market system. And
growing numbers of Portfolio Managers view independent dealers as institutions which best
exemplify integrity & fairness in capital markets.

Changing the rules is just the latest attempt to disenfranchise the Portfolio Manager. The Bank
wants to retain the client & his assets but remove the advisor relationship from the equation.
Eliminate the Portfolio Manager and you eliminate the relationship. i.e, converting from Portfolio
Manager based client relationships to Bank House Ownership with Salary based Advisors.

In effect, the Portfolio Manager is being systematically dislocated from the bank & disenfranchised
from his client. Years of carefully vested nurturing and relationship management become
evaporated in an instant.

The Declaration of Independence

How do I remove myself from this threat?

This is a war. It’s a war being waged against Investment Counsellors-Portfolio Managers. And
the Portfolio Manager is smack in the middle. He is the principal target. He / she needs to realize
that he is in an existential fight for his professional, economic survival. At the Bank, The Portfolio
Manager has become hunted prey rapidly facing elimination. They can either await their fate – or
they can get in front of the train and take action to stop the bank from disconnecting them from
their clients and the economic devastation that will follow.

The Portfolio Manager needs to understand: Only the Client owns the client. Neither the Bank nor
any other dealer gets to decide who owns or manages their account. This dispels the idiocy of
natural Bank ownership rights to the client.

Whether the Portfolio Manager is running Model Pools or Seg Accounts: Investment Counsellors
need to remember their fundamental value: Precisely for the ADVICE they provide and the
RELATIONSHIP they hold with the client. Since the Bank views them as an overpriced commodity
ready for slaughter – then why would anyone remain there!

Most important: Portfolio Managers should remove themselves from this Institution’s very bold
threat to his profession. Only then are they free to choose a firm that best aligns with their values
and recognizes them for the professionals they truly are!

Know Your Rights & Protect Your Interests before it’s too late!

For a Confidential Discussion: Email: mark@torenassociates.com