A partner in changing times

Manulife Investment Management understands that the advisory business sits at an inflection point. The firm’s tax and investment specialists meet with advisors on a regular basis, seeking to identify their pain points and offer services that can best help them demonstrate their value. They see an industry in flux and a need among advisors to move towards a value proposition built on smart asset allocation in tandem with tax and estate planning.

John Natale, Manulife Investment Management’s head of tax, retirement and estate planning services, and Philip Petursson, chief investment strategist and head of capital markets research, explain how the firm supports advisors by showing them how to demonstrate value in rapidly changing times. The first step is taking the time to listen to advisors.

“I think people are really focused on the markets and volatility right now,” Natale said. “In addition, advisors are facing product commoditization and fee compression. By providing advice and tax, retirement, and estate planning ideas and strategies to the client, advisors can distinguish themselves and significantly strengthen their value proposition.”

Natale and Petursson preach that gospel through teams that speak to advisors every day. Manulife Investment Management’s core team of lawyers, accountants and tax professionals travels across the country, meeting with advisors, consulting with them and supporting their efforts to guide their investments and strengthen their tax and estate planning acumen.

They answer thousands of questions from advisors every year about the particulars of tax and estate planning. They provide case-by-case consultation services and give educational presentations to advisory teams, offices and conferences. Petursson even hosts a biweekly podcast called Investments Unplugged.

“There are two very important aspects to investing,” Petursson explained. “It's how much you earn and how much you keep. I deal with earning, and John covers saving. I don't think you can just focus on one without the other. At the end of the day, regardless of your portfolio’s performance, if you're not structured properly, if you haven't taken advantage of the opportunities within your various accounts, the tax implications might be that you don’t keep as much as you could.”

The team also advocates for sensible asset allocation. Since last June, they’ve taken an underweight position in equities, which has helped advisors and their clients in the recent coronavirus selloff.

Manulife Investment Management doesn’t just speak to advisors – the firm also collects information from the end client, getting a complete picture of Canadians’ investment, tax and estate planning needs that is communicated back to advisors so they can build the client’s holistic financial plan together. In Manulife Investment Management, advisors get a partner with the resources, knowledge and professionalism to help build long-lasting plans for their clients.

One of the firm’s key goals is managing human behaviour, with the understanding that weak portfolio performance is more often a result of irrational human decisions than market performance itself. The team studies behavioural economics to understand the challenges advisors face around volatile times. Just as they try to add rationality to market decisions, they’ve built out tools to take the emotion out of both asset allocation and estate and tax planning.

Natale cited the example of estate planning, where a client might be concerned about giving an inheritance to their child, worried they’ll spend it unwisely. He espouses the annuity settlement option, which designates the inheritance received in the form of an annuity, delivering guaranteed instalment payments rather than a lump sum. In a potentially contentious inheritance situation, the Manulife Investment Management team advocates for segregated funds, a key investment tool that can protect a segmented inheritance from the public eye, or even other family members if necessary.

“What we're trying to do is preach discipline – discipline in terms of asset allocation, discipline in terms of how we make decisions, how advisors should make decisions based on fundamentals, not the latest panic in the news,” Petursson said. “If you stick with discipline to the process, when the markets are down, you're going to suffer some downside, but not nearly as much because discipline guided you to the right decisions.”

In the end, Manulife Investment Management’s tools are there to help advisors who are juggling a lot right now. Between finding new money, retaining clients, managing portfolios in a trying market and justifying fees, advisors can often feel like they’re spinning plates. Natale thinks advisors manage the big-picture stuff well, but their jobs now include a range of details that could, if overlooked, make or break an advisor’s strategy. He says Manulife Investment Management’s job is to help take care of those details.

“One of my biggest sources of happiness is demonstrating the potential value that we can bring to advisors and their clients,” Natale said. “Our goal here is to help individuals with their tax, estate and retirement planning goals, and we see the advisor as the key to that. Advisors have the clients’ best interests at heart, and I think they pick up on our tax and estate planning advice really quickly. We're able to impart that to advisors in a way that they can not only understand it, but they can then explain it to their clients so that they can understand it. And I think that’s very rewarding for them and for their clients’ end goals, too. It just breeds more success.”