Our industry is undergoing a fundamental shift in how we advise clients and what services we provide. There will likely be more emphasis on a full wealth management approach, rather than just portfolio management. So advisors need to adapt.
But it’s impossible for one person to be an expert in all areas of wealth management, including tax and estate planning. So how do you provide these services to your clients? By building a team that includes advisors and support staff (both internal and external) with various types of expertise.
For instance, Craig was a lawyer prior to working in wealth management, and has experience in tax, estate and insurance law. He also has a degree in economics. Grant has a degree in finance, and has worked in the financial industry for eight years.
But even with our experience and education, we didn’t have enough expertise in all areas of wealth management. So, we added team members. We hired a designated financial planner who’s also a CA, as well as an estate planning specialist who’s also a wills and estate lawyer.
When adding members to your team, identify the wealth management capabilities that would complement your own experience and capabilities. Even though Craig had a background in tax and wills, we still needed specialized advice in those areas to ensure we stayed up-to-date with laws and planning strategies. Our role as the advisors becomes more like that of a general medical practitioner. We identify the need or want, and then refer the client to the specialist to address it. By delegating these issues, we’re able to add more value by managing the client relationship, as well as their portfolios.
And while we’ve added individuals directly to our team, we’ve also built relationships with other accountants, lawyers, actuaries, mortgage brokers, bankers and consultants who have their own businesses. The latter is a mutually beneficial, cost-effective way to add to your team.
Building a diverse team adds to your competitive advantage. For instance, one of our clients is nearing retirement age. As a newer client, we suggested that he should speak with our financial planner to create a retirement plan and identify tax efficiencies or savings. Although this client had worked with a number of experts in the past, our financial planner was able to identify strategies that he hadn’t considered before. For instance, we suggested using an insured annuity to reduce his tax liability on death, and ensure an efficient transfer of wealth to his children. By assessing his entire situation, we’ve created a client for life.
Another example: We recently met with elderly clients who wanted to re-do their wills. Our estate planning specialist was able to identify a number of areas in their current wills that needed to be revised, or that could be improved upon. In particular, there wasn’t clarity as to which child would get their cottage, and what value would be attached to it. We came up with wording that reduced the potential for sibling disputes over this asset.
An additional resource is Breaking Through: Building a World-Class Wealth Management Business by John J. Bowen, Patricia J. Abram and Jonathan Powell. This book has helped us structure our business.
So, start thinking about what your team should look like. If you fail to do so, you risk the viability of your business in the long term.
This commentary reflects our opinions alone, and may not reflect the views of National Bank Financial Group.