Discovery process

Discovery process

Discovery process

Recginized by the Investment Industry Association of Canada with its 2017 Top Under 40 Award, Matthew Rodier knows firsthand how hard it is to build a thriving advisory practice. With 15 years at TD to his name, he now heads Rodier Asset Management, but hasn’t forgotten all it took for him to get there.

“It’s an extremely difficult business to get into as a young advisor,” he says. “I was in my mid-20s when I started; approaching people as old as your parents, trying to establish a rapport – it’s very challenging.

But if you have the right work ethic, have the right strategy, are organized and continue to educate yourself, that certainly helps. There is no recipe for success, but that’s what worked for me.”

It’s imperative for financial advisors to develop a strong foundation of trust with clients. That means putting all cards on the table when it comes to finances, which is why Rodier engages in a deep discovery process with each client before discussing stocks, bonds or any other investment vehicle. “That gives us their experience in investing, whether it’s positive or negative – if they were burned by something in the past, if they are risk-averse in general, and also if there are any major upcoming expenses,” he says. After that, Rodier and his team look at the client’s savings and balance that against

sources of income. It’s usually done in-house, but he sometimes brings in outside resources when necessary.

“We produce a very detailed wealth plan with multiple pillars, including cash-flow analysis, estate planning, wills/power of

attorney, as well as tax and retirement planning,” Rodier says. “It gives us a good idea of what the client needs. At that point we can feel confident about making a recommendation for X% in equities versus

Y% in fixed income.”

Since Rodier broke into the business 15 years ago, the means and methods of communication have changed considerably.

But while technology has altered the advisory business in many ways, Rodier explains that some things never change.

“There is still a lot of face-to-face,” he says. “It’s really important that we get to know our clients extremely well. Our clients are entrusting us with their life savings and their future, so it’s something we need to earn. That’s not typically earned through an exchange of emails.”

Those interactions will invariably involve a discussion about compensation, but Rodier doesn’t find that to be an awkward conversation. He’s confident about the value he provides for clients and fully supports any moves by regulators to make the industry

more transparent.

“Since day one I have been extremely open and realistic about the fees being charged and the expected returns over the long run,” he says. “Rodier Asset Management and TD are supportive of [CRM2]; the changes provide more information to clients, which lets them make better informed decisions about their finances and investments – that just makes good sense.”

Heading into the new year, Rodier is confident he has his bases covered. Whether the bull market continues to run or a correction materializes in 2018, he has balanced his portfolios for all eventualities.

“Things can change rapidly in this industry,” he says. “We are very well positioned to absorb a potential interest-rate hike or other economic or market-related changes. Our practice is set up in such a way that we are nimble and can pivot easily if need be.” In the Canadian markets, Rodier plans to maintain exposure to the companies and industries that have served him well in recent years. Chasing the highest possible returns could put his clients’ assets at risk,

so keeping one eye on the downside is always foremost in his mind.

“We try to underweight dramatically the riskiest sectors – materials, energy, resources,” he says. “We replace them with sectors such as Canadian financials, telecommunications or consumer staples. We understand that might mean less growth, but it also means less volatility, and those sectors have done quite well for us over thelast several years.”

 

Matthew Rodier, winner of the IIAC’s Top Under 40 Award, discusses what it takes for a young advisor to build a successful practice