A 'truly transformational' portfolio management firm

Company believes it can be the catalyst for growth by offering technology-driven alternative to independent IIROC and MFDA dealers

A 'truly transformational' portfolio management firm

The Canadian wealth management industry is in the early days of an independent revolution – and one firm is poised to be the “truly transformational” catalyst for explosive growth.

Toronto-based Q Wealth Partners believes the portfolio management space is akin to where the RIA model in the U.S. was in the early 2000s, but that the missing element has been the absence of platform providers, a role now synonymous with being a purveyor of integrated technology.

A number of independent brokers gained both assets and top-level advisors in 2020 despite uncertainty and market volatility. Many ambitious advisors, and portfolio managers feel stifled and disenfranchised at large corporations - a sense that’s compounded when presented with superior and more efficient technology elsewhere.

Enter Q Wealth, a large portfolio manager that believes in true partnership, a mantra that means partners own all the equity in their practice with “none of the risk and uncertainty of trying to do it from scratch”. It’s a model designed to “begin by beating every independent dealer in the country on both a cash flow and equity ownership basis”. And to top that with its ground-breaking technology offering.

Jared Rabinowitz pictured, one of Q Wealth’s Executive and Founding Partner, told WP: “Every other firm that’s come at fintech in the wealth space has made the promise of ‘we will take the table stakes and administrative paperwork off the advisor’s plate to give them more time to spend with their clients’.

Jared Rabinowitz

“The reality is they need to know what to do to fill that time with their clients. How do they provide a significantly enhanced value proposition, and how does the technology in their firm guide them in delivering that experience?”

Q Wealth highlighted a slew of “failed robo advisors” that were launched with the aim of disrupting the advisory space, only to backpedal when it became clear that technology could never completely replace human advice. Now, many robos vend their digital solutions to dealers and advisors, but they were not created to help the human advisor to be more relevant to their clients, unlike Q Wealth.

Instead of building the same technology as other Canadian robos, it bought the best-of-the-best systems, and hyper focused development-dollars on enhancing the advisor-client interaction. The QSuite tech offering brings together an ever-expanding ecosystem of apps that unify CRM and client portal, behavioural finance, financial planning, investments, insurance, with automated account aggregation, and real-time cash flow tracking across the client’s entire financial picture.

Clive Cholerton, executive partner, said: “When a firm comes to us, aside from giving them all of the technology, we come in and really work with them from a practice management standpoint.

“We’re going to really show them how to connect the financial plan to the portfolio, how they can maximize the skills and abilities of their staff, and ensure everyone on their team has a true career path, so they stay on for the long term, while reaching their full potential.”

He added: “We’re not just giving advisors technology and saying, ‘Wish you the best’. We’re saying, ‘We are going to give you great technology, we’re going to teach you how to work with it, to create an experience that will delight clients.

“Then, we’re going to help you accelerate the growth of your firm, so you’re putting more dollars into your pocket at the end of the day.”

Cholerton said the firm acts like a “management consultant” with the heart of a fintech company, filling the gap between the two pillars of technology and profitability. To that end, it has in-house departments dedicated to areas like partner success and branding/digital marketing, with the goal of bringing a new style to the industry.

For example, its marketing department is composed of senior execs from the music industry, using the same techniques to market advisors they would to support top international artists. 

Fee compression remains a hot topic in the advisory community and is set to remain so, with CRM 3 and future initiatives likely to shine a light on total cost of portfolio ownership. The Q Wealth partnership is focused on helping advisors meet this challenge with lower-cost access to the third-party solutions they love, complemented by innovative QW solutions to address the market challenges of the day.

While Q Wealth partners has been growing aggressively, the company is selective about who they work with.

Prospective partners must be a fiduciary, or be ready to make the leap, enjoy collaboration, have built a great team, and run a mature practice with revenue in excess of $2 million a year. They must not be investment-centric, and if they have historically been so, have a genuine desire to shift towards holistic wealth advice. Interestingly, Q Wealth pivoted in 2020 from exclusively working with former IIROC registered advisors and Portfolio Managers. It recently brought aboard two new partner firms from the MFDA world.

“Our unique technology platform, combined with our team and expertise, allows us to layer in the services of our existing PMs where required” said Rabinowitz. “Q Wealth is able to onboard an entire book of business in bulk, while upconverting it to meet all the standards of a PM firm. This includes ensuring every client relationship has the requisite KYC function, IPS, mandate tracking, and rebalancing performed by the firm’s head office trade desk.”

In addition to being registered as a Portfolio Manager, the firm is also an Investment Fund Manager – allowing for a suite of in-house solutions, as well as the ability to create and administer custom pools for partners.

Cholerton added: “We are not looking to be a quick exit strategy. We are looking for advisors that want to grow with us, and also want to help one another, sharing best practices. It is a true partnership.”