: Brian Callery - Submission

September 21, 2015

Expert Committee to Consider Financial Advisory& Financial Planning Policy Alternatives
c/o Frost Building North, Room 458
4th Floor, 95 Grosvenor Street
Toronto, ON M7A 1Z1

Dear Expert Committee Members:

I am writing this Letter, on my own volition, with respect to some of the issues being reviewed within our Industry.

I am a Practitioner of 40, plus years as a Life Insurance & Financial Advisor, Sales and Server. I have been through all of the Chairs of Advocis and The Life Underwriters Association of Canada and spent a number of years on the Ethics and Practice Committees, in order to maintain Professionalism and Accountability in our Discipline. I am also a Chartered Financial Planner, a Chartered Financial Consultant and a Chartered Life Underwriter.

I can appreciate that you are being bombarded by Practitioners and Association Advocates with numerous viewpoints, justifications and statistical evidence as to where things are currently and where they should go.

I also admit that any time Practitioners from any Discipline, Industry, Union or Organization of any kind communicate on these issues it will be to protect our own positions. Self-interest is alive and well from our side of the fence ... as well from the Consumer's side of the fence ... as well as from any Government Agency that is charged with the responsibility of finding common ground for all sides, based on evidence and judgement. I understand that.

We would be naive to think that your job in analyzing all the parameters of our Profession, or anyone else's for that matter, then coming up with recommendations for a remuneration policy is a simple feat. I am certain it is not. Anymore than I would be qualified to make a recommendation on your vocation or anyone else's unless I were to 'walk a few kilometers in your shoes' in order to fully understand what your employment mandate and measurement thereof would be.

From an Ethics and Practice point of view I do have to say that it is quite easy, for me, as I was raised a Christian in a large Farm Family with our Values set quite young by Wonderful Parents, Community and School System. We respect the Law. We respect the rights and dignity of others and have engaged in Service to our fellow person all of our lives. There is nothing someone else has that I need badly enough to steer someone in the wrong direction. We are committed to Excellence ... and am always willing to learn ... even at my age.

You would be welcome to visit my business operation anytime you wish. Sit in on Client meetings, meet with my staff of Practitioners and Support any time. Then you could 'walk a few kilometers in my shoes'.

Another area that seems to be causing concern is our Remuneration systems. They have been set in a Competitive Market-Place thus if something gets out of balance it will be corrected.

In order for someone to make recommendations to that end would have to have a deep understanding of our Business Practices.

Again, I am not naive enough to believe that there are not always some Practitioners who put their own Interests ahead of the Client or Customer. It has happened in All disciplines over the years! From Trades People, Automotive, High-Tech, Law Enforcement, Legal and Accounting Practitioners, Governments at all levels, Equities Market Dealers and our own Industry! I could go on and on. If one's Value Systems are not aligned then we know the consequences. That is why we depend on Oversight and Accountability knowing full well that things will still slip between the cracks.

On the remuneration side of our Industry we get paid a Commission on Products sold or at least a Service or Trailer Fee for growing and tending to a Client File. I have never been afraid to disclose this to Clients. I have always questioned practitioners who seem to be uncomfortable with that. My guess is these Practitioners have never really worked through their Personal Value Proposition with themselves nor their Clients.

Some people, especially on the outside, just see the Dollar Figure without knowing what is behind the Workload, Costs of Practitioner Operations and Services required to properly manage a Client File ... which is likely one of the most import files in a Client's Life; Protecting themselves against Personal Injury or Death while Planning for a Long Life without Financial Distress. Not an easy feat.

And People cannot do it alone. There is a commercial for a Fitness Program that says it all: "If you could do it alone, you'd have done it already"! The Public needs leadership, advice and counsel. .. to stay on track.

Why do you think that 73% of the Canadian Population do not have up to date or appropriate Wills? Or proper Insurances or Financial Plans? Why is the Provincial Government considering another level of Mandatory Pensions? Because the Public just is not doing it themselves!

There is a tremendous need for Advice and Counsel ... on an ongoing basis. If we were to charge our Clients (docket them) every time they called ... they would not call as often ... because they do not want to pay, directly! It is simpler for them to have their Service Costs built into their Products! That is also why they don't have adequate Wills .. .in general they just don't want to pay Legal Fees! Unless their Union or Group Plan can subsidize this.

With Service Trailing Fees, Accounted for, there is a Pooling Affect. And I believe it is efficient. There are some clients who pull down on their 'Service Pool' more than others, however it should balance out in the long-run. It has, because we have been able to bring services to our Clients for a long time, without leaving anyone behind.

With ever-expanding Overheads, Expenses and Taxes there may come a time when we won't be able to service smaller accounts that we can't negotiate dockets with.

And it is, sometimes quite expensive, to 'not' take the time and spend a few dollars to do things right: Case in Point; A Client of ours who was going into a second marriage wanted to wait until after the wedding to sit down and organize things. The new, to be, Spouse felt the same way ... so they carried on with business, real estate and investment issues as if they were married. Tragedy struck, a death occurred, there are Family members from previous marriages! Needless to say substantial complexities have arisen! The Legal bills are now over $58,000 and climbing! Because I have been her Financial Advisor for 15 years she calls me several times a week to help clean up or co-ordinate Legal/Accounting Advisors and the various issues that crop up. My Trailer Fee on all the Accounts is less than $10,000 per year. The Lawyer has reminded me that I have spent as much time on this as he has and has asked "What am I going to bill"? .... l have admitted that I generally absorb a lot of this type of thing in my Service Trailers, therefore I have not made any other arrangements ... so I will eat the time because she is a long-term client and friend! Can you see our dilemma?

The Long and the Short of this Case is; This is a very Expensive 'Will' for the poor Girl! Just because they did not want to spend the money on Wills or Agreements! And there is no ongoing pool of service funds to absorb some of the costs ... thus Clients are reticent to Invest in their own Risk Management.

Maybe this Challenge to the Industry is Good ... because it will force us to communicate the 'Real' Cost/Benefit of Advisory Service! And we will just not take on new Clients that won't agree to a Fair Fee. With my 8 Staff and Facilities my Costs of running my Operation is approx $1,000,000 per year! We are extremely Client Centric ... have always been. I have no issue in discussing these things with my Clients. Would you have an issue in providing a written report as to how you feel we should not be compensated for our work, thus we show this to Clients, so that we can negotiate directly with them and they can know the reason why ... again, just so they can understand where all this is coming from?

I look forward to hear from your Committee.

Please feel free to contact me for further discussion, should you wish.

Thank you for your time.


Wm. Brian Callery, CLU, CFP, CHFC