(February 2008) Business owners are dedicated, hard-working and very determined people. Just the sheer number of private enterprises in Canada suggests that small and mid-size businesses (SME) are a significant economic engine driving the Canadian economy. Many are also your future high-net-worth clients.

Article highlights:

  • Look past investment planning and examine an entrepreneur’s business, industry and personal choices to offer choices better suited to a business owner’s real concerns.
  • Learn how to listen.
  • Examine where your referrals come from and specialize.
  • Network – the best referrals don’t always come from existing clients.
  • Have partners with the necessary skills.
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Recent studies show there are 2.1 million SMEs currently operating in Canada. Another 900,000 are expected to set up shop by the end of this year. Statistics Canada says these businesses contribute 22% to the national GDP, a good sign that net worth among many of these entrepreneurs is among the highest in Canada.

Developing a book that includes such clients, however, requires a clear understanding of what drives business owners.

Mark Kinney, a former executive at RBC Private Counsel and one of three co-founders of Newport Partners, a firm specializing in serving high-net-worth small business owners, says advisors need to look past the investment side of financial planning and examine an entrepreneur’s business, industry and personal choices.

“Personal relationships [for small business owners] always spill over into business. He’s going to want to know that you have a vested interest in what he does, how he makes money and what is important to him.” Business owners, he says, generally “love their business; they don’t necessarily love their stock portfolios.”

Kinney’s partner, Doug Brown, suggests advisors examine some of the major events or situations a small business owner must face. He also suggests advisors think outside the “major illness, disability and catastrophic events” box and offer services better suited to a business owner’s real concerns.

“In our experience, major illness [and the like] are not the issues you most often come across with entrepreneurs,” he says. “Typically, the concerns revolve around shareholder disputes or loss of key individuals — such as a shareholder, a CFO or a COO. They also worry about family succession issues, credit proofing and tax planning. All of these issues might be considered loss-leaders for the advisor because they need to be done in the early days of planning, and they take an enormous amount of work.”

Robert Keilty, managing partner at HKMB, an international insurance broker, can appreciate why advisors might ignore small business owners — they rarely have anything to invest. That said, he suggests advisors should “hitch their wagon” to entrepreneurs with promising business prospects. “Sometimes your smallest clients grow and turn out to be your longest and best customers.”

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Advice for business owners
Brown agrees. “If you are willing to act as the quarterback and put in all of that effort and labour, you can end up with a wonderful client who is likely to become quite wealthy.”

Keilty says to start a relationship with a business owner, an advisor needs to learn how to listen. Once Keilty moved into a position of managing other advisors, he found many of the advisors he dealt with were far too busy selling their own expertise.

“All too often, the advisors focused on telling me about their qualities that they forgot to listen or they didn’t ask enough probing questions.”

Next: Listening provides some of the best clues about serving business owners.


Listening provides some of the best clues, those most needed when serving these clients. Entrepreneurs might do some of their own investing, but they don’t always have the big picture in mind. This, Keilty says, is the advisor’s biggest advantage and opportunity.

He suggests that advisors sit down with potential clients and ask them about overall objectives and portfolio goals. Only after listening to the answers should an advisor offer advice.

Listening to a client is only the start. In order to succeed, an advisor needs to specialize, adds Mark McNulty, co-author of The Canadian Small Business Owner’s Guide to Financial Independence and financial advisor at the Raymond James–McNulty Group.

McNulty describes how 30 years ago a dentist was referred to his senior partner. This referral led to more referrals, which prompted the firm to examine the type of client the partners were serving. The result was a choice to specialize in transitioning dentists — those within 10 years of retirement.

“It was a process of figuring out what we were doing over and over again and then constructing a specialization with that information,” recalls McNulty.

This business blueprint paid off for the McNulty Group. Despite numerous referrals, the group recently decided to cap its book.

“[This type of book] takes so much of our time. You can’t use Naviplan, or cookie cutter programs. You need to figure out what your client’s needs are, and then customize the plan.” In other words, this type of book requires specialization. “Every single client has their own needs. As an advisor, you need to adapt.” The key to adaptation, explains McNulty, is to “become very good in a very small area.”

Sandra Foster, president of Headspring Consulting, agrees, which is why she is adamant that advisors can’t do everything and be all things to all people. “If they don’t offer a specific type of advice, then they would be better off referring clients to someone else,” she says.

And Foster is not just talking about sticking to a chosen clientele; she’s also talking about the importance of networking.

Advisors know that referrals are the most important non-financial benefits they can derive from client relationships. What many advisors do not always realize is that not all referrals must come from existing clients.

Kevin Dehod, vice-president and associate portfolio manager of McLean & Partners Wealth Management, a Calgary firm that manages money for high-net-worth individuals, knows firsthand the difference a strong and diverse network can have on a practice. In an interview with, Dehod explained that referrals can also come from “strategic professional relationships.” As such, advisors need networks that include people who are “bigger, better and more successful than you,” as a form of motivation.

To start a network, Dehod suggests advisors ask their contacts to identify their best suppliers, experts and people in the business. Then, before asking for help from this group, he suggests that advisors take a step back and look at the proposed referral relationship from that person’s perspective.

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 • Leadership change
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 • Build your book
 • Links and resources
Back to
Advice for business owners
This step back is particularly useful when dealing with professionals who work with owners of not-so-obvious businesses — tile manufacturers or trained contractors, for example, where the playing field is competitive but very small. By knowing how you can benefit the professional and his or her clients, you will have an advantage when it comes to developing the business.

This is Newport’s model for success. “All partners at Newport have a great deal of training in their area, but every single partner has a network of professionals they can consult with on specific issues,” says Brown. The result is a company that, in less than five years, has attracted approximately 400 families, manages almost $1.2 billion in personal assets and advises a book of high-net-worth entrepreneurs.

“Entrepreneurs are good at running their business; they are not necessarily good at raising capital or finding value or a variety of other [financial planning] issues,” he adds. “Anything an advisor can bring to the table is critical, then, to the entrepreneur.”

As such, Brown suggests advisors work hard to develop a similar network. “If an advisor doesn’t have partners with necessary skill sets [that benefit entrepreneurs] then they should build that network.” This network should include lawyers, accountants, tax specialists — any designation the advisor does not currently hold. Then the advisor, as the project manager, needs to develop a “cursory understanding” of all issues that affect the entrepreneur and how these designations can help.

Filed by Romana King,,


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