When markets tanked in March 2020 amid the uncertainty of an emerging global pandemic, some investors panicked. Watching their portfolios dwindle in the biggest drop since the Black Monday crash of October 1987 and fearing the world as they knew it was about to end, many sold off their holdings—or at least considered it. Nader Hamid, portfolio manager and founder of the Total Wealth Management Group at iA Private Wealth in Montreal, had one particularly unnerved client who was abroad when everything shut down and borders closed.
“Imagine the level of stress and panic—you can’t get back home, you’re stuck in your hotel room and the news is reporting the worst of the market’s performance,” recalls Hamid. “He was calling and emailing me for comfort and to walk him through what was going on.”
Thankfully, Hamid was able to allay the client’s fears by putting the news into context—both in terms of how it compared to previous market crises and in contrast to the client’s diversified portfolio, which was in a much better position than the headlines suggested. So instead of liquidating his assets and missing out on the subsequent market rebound, the client stayed the course. “Now his portfolio is as high as it’s ever been,” Hamid says 18 months post-crash.
Being that trusted calm in the storm is just one way Canada’s Top Wealth Advisors provide value to their high-net-worth clientele. And, given that the 150 advisory teams on our list manage more than $100 billion in investment assets, there are clearly plenty of Canadians who are happy with the specialized services these professionals provide.
At the same time, however, Reddit and other social media platforms are becoming go-to sources for investment advice, with so-called meme stocks seeing huge gains in value. In January, for example, millions of investors—mostly millennials with a soft spot for old-school video game retailers—flocked to online trading sites to purchase shares of GameStop Corp. and prevent Wall Street short sellers from driving the company out of business. After skyrocketing in January, the stock was still up more than 923% year-over-year in September, making the Reddit-as-advisor approach seem less sketchy than one might think.
Robo-advisory services are also increasing in popularity, offering clients simple “set-it-and-forget-it” portfolios that deliver solid returns by minimizing fees. About 360,000 Canadian investors now use robo-advisors, up 10.3% over 2020, and that number will increase by another 39% to 500,000 users by 2025, according to research firm eMarketer.
So what are these successful advisors doing to differentiate themselves and win over clients in an industry where Reddit and robos are seen as viable alternatives?
To start with, robos and wealth advisors aren’t truly comparable in terms of the products or services they offer. Most robos build cookie-cutter portfolios from a selection of exchange-traded funds designed to provide broad exposure to stock and bond markets. Wealth advisors, on the other hand, can choose from an open array of investment products on their clients’ behalf, which may provide better diversification.
Moreover, because robos are built to scale, they’re not good at providing the personalized wealth planning advice high-net-worth clients are seeking.
“Our clients rely on us for so many things—not just the investment piece—that I can’t imagine a robo-advisor giving them what they need,” says Mary Ellen Byrne, vice-president, portfolio manager and investment advisor at TD Wealth Private Investment Advice in Halifax. “Everything is interconnected. They want to know about when to take CPP and OAS, and if it’s going to get clawed back. It’s not just stock picking.”
That comprehensive financial approach can save clients thousands or even millions of dollars, through the right tax strategies, the placement of assets, estate planning and more. “This is not discount brokerage. You need to add value,” says Andrew Cook, senior wealth advisor and portfolio manager at Scotia Wealth Management in Vancouver. “That’s why you’ve seen financial institutions broaden the deliverables. Clients are looking to us for holistic advice.”
That tracks with the findings of the 2021 EY Global Wealth Research Report, which suggests there are growing expectations for the “basic” elements of wealth offerings to be provided at zero cost, but that clients are willing to pay more for the right combination of individualized advice and digital tools.
“Perceptions around value for wealth management products and services are rapidly changing,” says David Hurd, EY Canada national wealth and asset management leader. “Investors are looking for expertise that’s personalized and tailored to them, beyond the traditional advice on investments. You hear the term ‘financial wellness coach’ thrown around.”
According to results of the Canadian study, which surveyed more than 500 high-net-worth investors, a whopping 80% prefer to deal with a human advisor rather than go through only digital channels. Of course, they want the bells and whistles that technology can offer too—more than half of respondents plan to ramp up their use of digital and virtual tools, including engaging more with advisors virtually—but not at the expense of a human relationship.
Smart advisors are leveraging technology to streamline communication with clients, handle administrative tasks and meet compliance requirements—which allows them to devote more time to what makes them unique: being human. The advisors in our ranking offer clients compassion, coaching and continuity—qualities robos can’t easily replicate. More importantly, characteristics like these help set them apart from other wealth advisors in Canada, which goes a long way in terms of attracting and retaining clients.
Take Maili Wong, for example, who was working in the building adjacent to the World Trade Center in New York City on the morning of Sept. 11, 2001. It was her second day on the job, she knew almost no one in the city and, after the towers fell, she had only the concrete-dust-covered clothes on her back. She didn’t even have a home left to go to. “I thought I was smart getting an apartment close to the office,” she says. “I was homeless and very scared, and I didn’t know what to do.”
She’s never forgotten how vulnerable she felt that day. Now, as executive vice-president, senior investment advisor and senior portfolio manager at Wellington-Altus Financial Inc. in Vancouver, she leans on that experience when her clients may be feeling vulnerable, as they were about both their personal and financial health at the onset of the pandemic.
“I tried to be a stabilizing force with all the chaos around us,” she says. “Every one of our clients received a phone call—to see how they were doing and to remind them there’s always volatility along the way. I want them to stay focused with their financial plan rather than acting on emotions.”
Along with empathy, top advisors offer the simple benefit of attention. Byrne of TD Wealth meets with clients at least once each quarter, and every meeting has its own defined purpose—be it an assessment of cash flow, a tax review, retirement projection forecast or estate planning. But she goes beyond these basic touch points to find ways to show clients she’s thinking of them. For example, she dropped off a bottle of champagne to a client who was retiring and had frozen meals sent to someone who happened to mention her son was in a motorcycle accident. “She could not thank us enough that we cared enough to do that,” says Byrne.
The value of providing that individual time and attention is something Cook learned well before embarking on a career in the investment industry, when he was a personal trainer. He’d see his clients three or four times a week over an extended period, helping them make changes in their lives. He would coach them through their challenges and celebrate their successes, as he did with one trainee who lost 100 pounds. Being there, and providing accountability, was critical to the job. The same is true for the investment industry, he says.
“A robo-advisor won’t hold your hand through a once-in-a-generation event, and it doesn’t know your situation or family dynamics,” says Cook. “Technology can tell you what you need to do, but it won’t help you stick with it. Execution is what matters.”
Hamid agrees: “The factor that most determines long-term results isn’t product, stock selection or even fees—it’s investor behaviour. We can help coach them through those difficult situations.”
Such coaching can be so beneficial that clients often ask Wong to work with their children or grandchildren to help them become financially literate. “They really care that their grandkids are good with money and want to instil those values in future generations,” she says.
As such, a wealth advisor can become a trusted source for the entire family, which Cook experienced with a particular longtime client. In addition to providing the usual investment advice, he helped the client sell his businesses and later set up a private foundation for his family to create a philanthropic legacy. “Now, with his health failing, the family trusts me to take care of their interests because of his implicit trust in me over the years,” Cook says. “The journey we’ve been on together is just outstanding.”
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