Conventional wisdom among advisors dictates high-net-worth clients are the most desirable — after all, they have more money. But subscribing to conventional wisdom can cause you to miss opportunities.

Read: Advisors bypass small households

What about the nearly two million Canadians with between $200,000 and $400,000 in investable assets? This middle layer is often underappreciated, but can provide plenty of lucrative business to savvy advisors. Al Roissl, managing director of Desjardins Financial Security Integrated Network, Ontario Central Region, Toronto, encourages advisors to think smaller first.

“Too many times new advisors want to chase these large accounts, and it’s not going to happen,” he says. “Somebody with more experience is going to scoop them. I always encourage advisors to go after that middle-class marketplace. There are a lot more of them, and they’re underserved.”

Plus, “They’re the ones who are going to receive the inheritances from the previous generation,” Roissl adds. “And it’s just a matter of time before that happens. If they’re treated well when they’re a smaller client, they’re going to stay
with you and become a bigger client.”


People in this asset class generally have one goal: a secure retirement. Middle-class Canadians with assets above the $200,000 threshold are likely to be near retiring anyway, says Keir Clark, a branch manager and senior wealth advisor at ScotiaMcLeod in Fredericton, NB.

Jake Nemec, a financial planner in Victoria, BC’s main BMO branch, says “Forty to 65 is the sweet spot.” Clark adds clients tend to have one of two perspectives. Some are what he calls ants: frugal, diligent savers who painstakingly build assets over the long term and are riskaverse.

The challenge is to help these clients understand how they can make their money last, because they’re starting out with a smaller pool of capital compared with their wealthier counterparts. On the upside, they’re more likely to have reliable pension plans, but that money is managed for them generally without their input.

Read: Stress-testing your retirement plan: how big is my cushion?

With this group of very conservative investors, Clark says, “you need to convince them that they need to take a little bit of risk to achieve the rates of growth necessary to keep up with inflation.”

He calls the other group grasshoppers: higher-income earners who haven’t gone through a planning exercise. They have high return expectations, and are often willing to take risks. But it also falls to the advisor to coach them into paring back their higher-flying lifestyles. That’s because even though $400,000 in investable assets seems like a lot, says Nemec, “Over a 40-year drawdown period, it may not be enough to retire on. But if someone has a defined-benefit pension, it may be more than enough to supplement that pension.”

The category your client falls into affects the conversation you have, but it has less impact on the investment strategy. Portfolios for most mid-range clients tend to look similar, and with good reason: with many clients in this bracket close to retirement age, there’s often less room for course-correction (younger ones are likely to be higher earners, so they have more options). They’re chugging toward retirement, so capital conservation and modest growth are the order of the day.

“They’re not shifting assets all the time,” says Roissl. So if you put the right system in place you can manage those assets quite cost-effectively. They’re not high-maintenance if you set them up correctly.”