Cost cutting drove surplus for Advocis in 2024

Advocis posted a surplus of $1.8 million in 2024 — a reversal from the prior two years — achieved largely by cost cutting, including staff cuts.

Summaries of the association’s 2024 financial statements are included in its annual report, posted online Wednesday. Advocis held its annual general meeting on June 27.

The association’s $1.8-million excess of revenue over expenses compares to a deficit of $766,426 in 2023 and a deficit of $2.7 million in 2022. The 2024 surplus was driven by cost savings of $2.3 million — $1.4 million in operating expenses and $907,000 in service delivery. Revenue increased by $432,000, or 4%, year over year, to $12.5 million.

Operating expenses were $8.8 million, down 14% from $10.2 million the prior year. “This included a $1.8-million (28%) reduction in employee-related expenses following the organizational restructuring initiated in late 2023,” the accompanying management discussion and analysis (MD&A) says.

On the association’s income statement, those employee-related expenses are “compensation, benefits and other staff costs,” and were $4.5 million in 2024, down from $6.3 million the year prior.

Advocis’ 2022 financials, released in mid-2023, revealed that the association had struggled with liquidity. Linda Illidge, former vice-president of finance and administration, left in July 2023 after nearly 20 years. Longtime CEO Greg Pollock was ousted in September 2023 and subsequently sued Advocis for wrongful dismissal in December 2023. Pollock’s salary was more than $468,000 when he was terminated, according to his claim. In March 2024, former chief operating officer Julie Martini sued for wrongful dismissal; her base salary was $200,000, according to her claim.

CEO Kelly Gorman joined the association as it headed into the final quarter of 2024. When asked in an interview about staff headcount, she said the association doesn’t share that information publicly and that the most important metric related to staff headcount and staff cost is “member impact.” She said driving outcomes for members requires investment in technology, for example, which is part of the association’s business plan, and a budget surplus allows for that. A surplus is also projected for 2025, she said.

Advocis’ 2024 cost savings were offset by a $512,000 (25%) increase in professional and consulting fees to more than $2.5 million. (In 2022, professional and consulting fees were $1.7 million.) The increase is “related to external legal and advisory support in support of the restructuring initiative,” the MD&A says.

The $2.5 million* was “spread across a number of different categories,” Gorman said, including legal and audit expenses, as well as consultant expenses as the association invested in a new financial reporting system.

Cash at year-end 2024 was $2.8 million compared to $1.8 million the year prior. Financing of $710,785 included $48,576 in advances on insurance cash surrender value. The previous year, financing was $774,558, including $664,628 in advances on insurance cash surrender values.

The current year involves no financing, Gorman said.

Advocis settled both the claims from Pollock and Martini in November 2024, but no details were disclosed. Last year, Advocis also settled with education provider SeeWhy Financial Learning Inc. for nearly $100,000 for non-payment of SeeWhy’s learning materials for the life licence qualification program.

In 2025, Advocis continues to face legal costs. SeeWhy filed a second claim against Advocis in February, alleging breach of contract. That same month, cybersecurity firm Net-Patrol International Inc. sued Advocis, alleging breach of contract. The cases are ongoing, with Advocis denying the allegations and filing counterclaims in each case.

Also in February, Advocis informed members of a human rights complaint that was filed that month by a laid-off former employee. In an email on July 24, a spokesperson for Tribunals Ontario said submissions in the case are under review with an adjudicator to determine next steps.

2024 surplus

Regarding the 2024 surplus, “part of it goes to the replenishment of the [Century Initiative] fund,” Gorman said. “That’s our commitment.” Another part will be reinvested in membership. “We’re being very prudent with respect to how we use our surplus, and that will continue,” she said.

The CI fund, created in 2006 to ensure the association’s capitalization and funded with premium membership fees, was $3.8 million on Dec. 31, 2024, up from $3.3 million a year earlier. At the beginning of 2023, the fund was $5.6 million. Advocis took $2.7 million from the fund that year to keep the association’s fund balances positive, with $2 million repayable with interest.

The association’s fund balances at year-end 2024 were $4.8 million, compared to $1.2 million in 2023, according to the financial statement summaries, with the improvement about equally attributable to the excess of revenue over expenses and actuarial gains in retirement benefits.

Gorman said she’s “pleased” with the 2024 financials, and she noted senior leadership’s “hard work.” Still, “we’ve got a lot more work to do,” she said. “It’s not about just stabilizing; it’s about thriving.”

Membership fees were flat year over year. The association had more than 4,300 full dues-paying members, and 7,400 members in total at the end of 2024, the annual report says.

New blood

Part of the association’s business plan is to grow a pipeline of talent to the industry. Last week the association launched an emerging leaders committee that will help shape Advocis’ strategic outlook. Other parts of the business plan are providing services, including digital tools, to boost members’ professional capacities; increasing demand for the association’s credentials; and protecting the integrity of the profession though such things as regulatory engagement and governance modernization.

Earlier this year, Marsha Gerhart came onboard as general legal counsel. With a securities lawyer on staff, “we’re really well poised to step up our game in advocacy” and consultation participation, Gorman said. Advocacy is something members “expect from us and it’s something we’re going to make sure we’re delivering on.”

Gerhart was most recently with the Financial Services Regulatory Authority of Ontario as a strategic lead within market conduct. She also worked for the former Investment Industry Regulatory Organization of Canada and, as did Gorman, the Ontario Securities Commission.

In 2025, Advocis will be reviewing its complaints and discipline processes as a credentialing body under Ontario’s title protection, to ensure the processes are “exceeding best practices,” Gorman said. The chartered life underwriter credential is being updated, and a streamlined professional financial advisor credential will be re-launched later this year.

The annual report says the 34 Advocis chapters provide professional development, mentorship, financial literacy and advocacy. In 2024 the Advocis chapter leadership council — volunteers — led governance efforts that resulted in several chapters merging. That work will continue.

Members’ commitment and feedback “affirms the direction we’re taking,” Gorman said.

*This figure, previously stated as half-a-million dollars, was updated to reflect the full amount of $2.5 million. Return to the edited sentence.