The Whiteboard: true integrated planning and fee retainers are just two areas where other countries can inspire Canadian firms
At Endeavour Wealth Management, we are big believers in having an open mind about our business and that it’s important to broaden our horizons. This is in our DNA, is part of our culture and has even been built into our contracts for staff.
Truthfully, I have never understood why firms spend so much time tracking employees’ vacation. Personally, I think it is way more valuable to evaluate performance and to trust your people in that they are going to get the job done. That is why in the last year we implemented a new policy where we no longer track maximum vacation time for employees and instead have mandated a minimum vacation policy instead. We encourage our people to take more time with their family and also to see the world and gain new perspectives on how other people live.
This policy goes for our advisors as well, including myself. One of the things I like to do when I travel to other countries is to visit other wealth management businesses and learn what they are doing differently. Despite the negotiation I have with my wife about taking our vacation time for “work”, I have found these experiences to be invaluable in forming our business and providing a competitive advantage. Allow me to share with you some of these insights.
You have likely already heard this, but I have found it to be true that Australia, U.K. and U.S. are likely five years more advanced than our industry here in Canada. This is the case for a variety of reasons, not least of which is enhanced competition. In the U.K. and U.S., fierce competition drives innovation in the financial services industry. In a capitalist environment where only the best survive, you are either forced to keep up with technology and client experience, or you wither and die. In the U.S., this forces companies to up their game and deliver exceptional service and comprehensive solutions.
In Canada, we talk a lot about integrated and comprehensive wealth management planning, but the reality is that very few advisors are really doing it. Many firms I have visited in the States have integrated tax preparation and legal advice internally along with more traditional wealth management solutions, including financial planning and investment advice. Don’t misunderstand me, I know a lot of firms in Canada offer estate planning and tax advice but this goes a step further in many other countries where they not only provide the advice but are also able to execute that advice.
A few years ago, while visiting family in Adelaide, Australia, I visited a firm which was built out of the foundations of an accounting practice. Accounting and tax advice were still at the heart of the planning work it did, but it had grown to be so much more, recognizing their clients needed that integrated service. The advantage is they can add value for their clients even before they enter that high-net-worth demographic and create true lifelong clients … not just a service for rich people. The advantage to their clients is that they receive comprehensive and specialized advice at every stage of their life, not just when they have money.
Enhanced competition goes beyond just the financial firms themselves and has huge impact on financial software companies. In larger markets, there are more options available to firms looking for software solutions. In Canada today, there is a big push for full integration of software systems across account management, financial planning and client relationship management. The goal is to create a single advisor dashboard from which you can not only manage your clients’ needs and experience, but also recognize opportunities and prompt you to deliver enhanced services. This is something I have seen first-hand in the US and now firms are even pushing beyond this for more integrated Artificial Intelligence, which will not only alleviate overhead costs but also provide enhanced client communication and experience.
Innovation goes beyond technology and also includes business and revenue structure which best fits in-line with client objectives. Something I have seen become more common over the past few years in other countries is a fee retainer. Most firms I have met with still use a fee-based offer where they charge a percentage of assets under management, just like most advisors do here. A fee retainer has, however, become more attractive to a number of client demographics, including ultra-high net worth and early investors. In the ultra-high net worth category, $10 million and higher, this model has become attractive for clients as it ties the fee more directly to the service that is being provided by the advisory firm. For early investors, this model is also attractive because it ensures that their advisor has invested interest in spending adequate time with them and providing quality advice. I know that there are some companies that offer this model in Canada already, but I can see it becoming more mainstream in the near future.
I have always had the belief that as advisors it is important we share our best practices ideas with others and more importantly to be open-minded to hearing their ideas as well. In my experience, this is what has separated the best and most successful from the rest. Today, we are fortunate because not only do we have the opportunity to learn from other local advisors, or even advisors across the country, but we can also take a page from the rest of the world. With this opportunity available at our fingertips, if we want to truly deliver world-class advice and experiences, then it is something we must do. If you move fast enough, you may even get a few years head-start on your local competition.
Grant White is a Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.
This information has been prepared by Grant White who is a Portfolio Manager/Investment Advisor for Industrial Alliance Securities Inc. Opinions expressed in this article are those of the Portfolio Manager/Investment Advisor only and do not necessarily reflect those of Industrial Alliance Securities Inc. Industrial Alliance Securities Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.