If recent election cycles are any indication of what to expect in the upcoming federal one, voters should prepare for rhetoric appealing to that most politically useful and nebulous demographic: the middle class.

Democratic contenders for the White House are wasting no time positioning themselves on the party’s left, with proposals including a wealth tax, inheritance tax hikes and a 70% income tax on high earners. Ontario’s trip to the polls last year saw the “For the People” Progressive Conservatives defeat an NDP challenge with plans to raise income tax on top earners and introduce a tax on luxury cars.

And while a Liberal re-election bid may leave out claims that private corporations “avoid paying their fair share,” we can expect the incumbents to focus on what government benefits have done for the middle class and those working hard to join it.

For financial advisors, the focus could hardly be more different. Firms are moving away from the middle class to compete in the increasingly crowded high-net-worth space. Investors Group completed its rebrand last year to IG Wealth Management, a repositioning to court the coveted HNW segment that saw the company shed more than 1,000 advisors, many serving less lucrative clients.

Meanwhile, Scotiabank paid $2.6 billion for MD Financial almost a year ago for a foothold in the market of consistently high-earning physicians who require complex financial advice—a segment with whom TD and others are also seeking to curry favour.

The incentives are different for politicians. Campaign financing aside, every vote has the same value. Some advisors, meanwhile, will argue they can’t afford less wealthy clients, especially as regulation moves, albeit slowly, away from forms of commission that rewarded them for serving smaller accounts, such as deferred sales charges.

It’s worth asking how far this can go, though. How many hands can reach into the same pot before finding it empty?

First of all, the obvious point: the majority of Canadian households have investable assets of less than $100,000. This “mass-market” segment accounted for two-thirds of households in 2012. Just more than one-quarter of households fell into the “mid-market” segment with between $100,000 and $500,000 to invest. Only 6% of households had investable assets of $500,000 or more.

By 2017, that top figure was up to 10% of households, according to Strategic Insight. And that wealthiest cohort held 87% of Canada’s $4 trillion-plus in financial wealth. The crowding around the country’s 125,000 doctors and other HNW clients makes sense—even if it doesn’t change the fact that there are only so many big clients up for grabs.

Advisors looking to serve the broader market should consider that not all small accounts will stay that way. The younger generation has been notoriously slow to move out of basements, sort out student debt and find stable employment, but most economic indicators show that millennials are finding their financial footing.

They’re also just entering their higher-earning years. And because defined benefit pensions are increasingly scarce and contract work is on the rise, young professionals will need more help managing their money.

Additionally, their parents are beginning to transfer their wealth—somewhere in the neighbourhood of $900 billion over the next decade. Servicing an account that may not pay handsomely today could prove rewarding in a few years.

The other point is that what’s considered a manageable number of households to serve is evolving. As the industry moves away from time-consuming stock-picking, back-end improvements and online communication could drastically reduce the amount of time required for each account.

Michael Durbin, president of Fidelity Institutional, told Barron’s in a recent interview that advisors serving 150 households today could soon be handling three or four times that number. New technology will allow the industry to scale with a level of personalization that will lead advisors beyond the wealthiest clients, he said.

“The best upside we have as an industry is serving more down-market households,” he said. “And we’ve got to embrace the promise of all these technologies in order to do it.”

The rush is on to add coveted HNW clients to books. While that will prove lucrative for some, advisors should be thinking about how to serve the many.

Mark Burgess is managing editor at Advisor’s Edge. Reach him at or on Twitter, @marktburgess.