Most financial advisors would agree that the early years of the job are the most difficult. Often the difference between those who succeed and those who fall by the wayside is the right kind of teaching. Mark McNulty had an obvious tutor – his father, Barry, was also an advisor. Having his dad in the same office allowed McNulty to learn the ropes and become a specialist without the pressure of driving business.
“He handled making money, so I was able to focus on gaining technical expertise,” McNulty says. “Most people who enter the business don’t have the time to become experts in planning. Not having to generate business right away was my greatest advantage, because by the time I was generating business, I really could add value.”
Working with his father also proved to be an advantage when clients sought the guidance of an experienced advisor rather than a relative greenhorn.
“Initially, you are speaking from textbooks – you don’t have that much credibility,” McNulty says. “It takes a number of years. Having my father around was a big advantage because if clients had questions they weren’t happy being answered by a 33-year-old, they could talk to him.”
Today, the novice has become the veteran, and as president of The McNulty Group, McNulty is the one doing the teaching. In his opinion, it’s only natural that certain clients prefer an advisor with some grey hairs. He stresses the importance of patience for advisors who are just starting out. “I have some young guys working with me now, and I tell them they are coming along incredibly well,” he says. “But we can’t control the fact that a 60-year-old dentist selling his practice doesn’t really want to hear the opinion of 30-year-old advisor. It just takes a certain amount of time.”
In building the family business, McNulty decided the firm needed to specialize in one profession in particular. Dentists tend to have wealth, but they don’t necessarily know how best to manage it and prepare for retirement. This has meant some have fallen victim to unscrupulous advisors over the years, which allowed McNulty to develop his practice as a place dentists could rely on.
“Dentists have been targeted by financial advisors for a long time,” he says. “Every other dentist I meet, their initial reaction is they have a hard time trusting advisors because they have been screwed over so many times. The more those guys who are screwing them over get out of the business, the better the business will be.”
The McNulty Group serves 100 clients, almost all of whom are dentists. By limiting the number of clients and focusing on just one profession, McNulty believes he can offer a lot more to his clients. He says a financial advisor shouldn’t aspire to be a jack of all trades – rather, like a dentist, they should be a specialist.
“Because all my clients are homogeneous, I can apply their experiences to the next person,” he says. “If a client is making a life decision about selling their practice and retiring, it helps that I have done that hundreds of times with the same kind of people. I really don’t see how all these generalists in our industry survive, because each person is so different.”
When it comes to improving ethical standards in the wealth management space, McNulty believes there needs to be greater consistency in regulation. Presently, he thinks certain parts of the marketplace are smothered in red tape while other areas are ignored, to the ultimate detriment of Canadian consumers. As such, he believes wealth management needs a level playing field.
“There is too much discrepancy for different financial products,” he says. “The insurance business is like the Wild West; meanwhile, the regulators are being too hard on portfolio managers and investment counselling firms.”
Such double standards are putting consumers at risk, he says, and it needs to be rectified sooner rather than later.
“It becomes difficult to make some investments without going through five different compliance people, but with insurance you can sell someone a product like permanent life insurance that could destroy them financially,” McNulty says. “It’s absurd. Regulation seems to be reactive, and with insurance, any negative ramifications won’t be felt for decades.”