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Providing access to a broad spectrum of investments and holistic planning are key to retaining clients during periods of market volatility.

Breadth of investment choice and advice drives client retention at Nicola Wealth

Through a period of intense public market volatility that rattled many investors’ nerves, Nicola Wealth has maintained a client retention rate above 99% – and above 99.9% through the first half of 2022. Important contributing factors, according to Cameron Smith, vice-president, advisory services, are access to a wider than usual pool of investment choices and a commitment to helping clients with aspects of financial planning that go well beyond investments.

“We have a unique approach to our work with clients,” says Smith. “The end result [is] we’ve hardly lost any clients at all, and we are continuing to onboard clients at a very strong pace.”

Traditional asset allocation blends publicly traded equities and bonds into a portfolio that matches an investor’s goals, risk tolerance and time horizon. However, Nicola Wealth offers broader diversification into assets that don’t fully correlate with either equities or bonds and can provide additional stability when public markets get turbulent.

“We do have positions in publicly traded fixed income and equities, but we also provide exposure to hard asset real estate, venture capital, private equity, private debt, commercial mortgages and other investment strategies,” Smith says. 

At points in the past, bonds have been a safe haven when equity markets were shaky – but that’s not true at this time as interest rates are rising. There’s also the inflation wild card. 

Smith stresses it’s very important for advisors to have access to diverse products that can soften ups and downs and maintain income streams because this has the potential to dramatically improve clients’ investment results and satisfaction.

“Our exposure to assets that are truly diversified – and many of which generate consistent cash flow – has allowed us to deliver consistent returns, and many of our clients have experienced, at this point in time, positive returns so far this year, which is unique in the Canadian investment space,” says Smith.

Offer more than investments to build loyalty

Another effective way to build loyalty with clients is to treat investments as just one part of a comprehensive financial plan.

“We are unapologetic about our approach to planning. It is the way we lead all of our discussions,” Smith says. “We spend a significant amount of time just getting to know our clients. What is their current situation? Where are they hoping to go? Is their tax planning as efficient as it can be? Are there philanthropic aspirations? How do they transition wealth to the next generation?” 

Holistic planning gives context to investment discussions – both when deciding where to invest and when reviewing returns. It also provides an opportunity to, for example, save money through tax planning to balance out periods of negative investment performance. 

“The historic stability of our approach, when you combine our investment philosophy and diverse investment platform with that approach around financial planning and putting the client and their family at the centre of it all, has historically led to some very good client outcomes,” says Smith.

In general, Smith has found that a certain type of advisor gravitates toward this way of working with clients. They’re often driven, dedicated to their craft, looking to evolve and get better – and, critically, enthusiastic about collaboration. 

That last one is important at Nicola Wealth because many client files are managed by two advisors who work together and with wealth planning associates to help drive the best outcome for each client. Collaboration is also reinforced by the ownership structure of Nicola Wealth Management, with advisors given the opportunity to participate as shareholders in the firm. 

“If I am an owner in the firm or participating in the profits of the firm, I want to see my colleague down the hall be just as successful as I am. And that new person who’s just come through the door? I want to spend time mentoring them, getting them up to speed, because it’s one thing if I can drive results as a single contributor, but if seven or eight or 10 people that I can influence can also drive those same results, there’s a massive compounding benefit to everyone involved,” says Smith.

The other place where collaboration is front and centre is the onboarding process, during which advisors are set up with two or three sponsoring advisors who provide mentoring and support. New advisors are also connected with a support pod of three additional peers who broaden the new advisor’s community within the firm and make themselves available to answer any and all questions.

“That collaborative spirit with fellow advisors in the firm never goes away,” Smith emphasizes, even as the structure around it lifts once an advisor is up and running and feels comfortable. “We describe our culture as ‘sharing the pie,’ and a big part of it is sharing your thought leadership, your effort and your knowledge with your colleagues.” 

Cameron Smith Vice-President, Advisory Services, Nicola Wealth

About Nicola Wealth 

Nicola Wealth is a wealth management firm dedicated to serving the complex needs of high-net-worth families, entrepreneurs, and professionals. Today, the firm operates offices across Canada advising institutions, foundations and multi-generational families. Nicola Wealth is responsible for over $11.5 billion in assets under management (AUM), investing in a wide range of asset classes including public and private assets including institutional-grade real estate, private equity, private debt, commercial mortgages, among others. For more information, please visit www.nicolawealth.com. 

This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.