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Clients getting more face time with financial advisers

Barbara Stewart, portfolio manager with Cumberland Private Wealth Management Inc., says the future of investment management service isn’t just about buying and selling stocks – it’s about 'thought leadership.'

Fernando Morales/The Globe and Mail

It wasn't that long ago when markets were bullish, returns were in the double digits and wealth-management firms could keep most clients happy just by calling them occasionally and taking them to a ballgame once in while.

That was then, pre-2008.

This is now: After years of excruciating market volatility, wealth-management firms find themselves in an increasingly competitive environment in the chase for high-net-worth clients – the growing number of Canadian households with more than $1-million in investable assets.

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To attract and keep those clients, wealth-management players are customizing their communication and providing more services. Not only are clients receiving more frequent and more detailed reports from their advisers, they are also being advised on everything from tax planning to how to live healthier.

"Any opportunity to engage with the client now is just jumped on," says Betty Tomsett, director of wealth management at Richardson GMP Ltd. "Communication with clients for me has become more personal, more frequent and more visual."

The general reaction by clients to market turmoil is to become more engaged with their investments and to feel increasingly sensitive to risk, she says. It's the adviser's job to make sure clients understand "how all this market activity affects them and how it affects their market strategy."

Getting that message across requires more frequent phone calls and meetings, she says. And to cut through the industry's notoriously "user-unfriendly" terminology, Ms. Tomsett sets up online meetings with more visual presentations.

Tony Maiorino, vice-president and head of Royal Bank of Canada's Wealth Management Services, finds clients much more sophisticated than they were a decade ago. With the global economy a mess, clients "have moved beyond worrying about what is happening in the markets. They say, 'Okay, this is happening – what are the things I can put in place to mitigate it?'"

And that's where Mr. Maiorino's group comes in – 186 "wealth planners" who don't manage investments but are lawyers, accountants and financial planners who offer advice on a range of other topics.

"They bring us in to have supplementary conversations with clients about how to structure their wealth – not what stocks do I own, but how do I register my wealth? How do I make it easy to transfer to the next generation? How do I make sure my children are prepared to inherit it? How do I ensure I have the right tax structures in place?"

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Wealth-management clients have come to expect that level of expertise, Mr. Maiorino says. Yet, "five years ago, those things wouldn't be in the mix."

It's a change that Barbara Stewart knows well.

The portfolio manager with Cumberland Private Wealth Management Inc. says the future of investment management service isn't just about buying and selling stocks – it's about what she calls "thought leadership."

"Firms have to sponsor ideas and really direct what's going on in the brains of the client," she says.

For instance, her firm sponsored a talk last week by U.S. neurosurgeon and CNN journalist Sanjay Gupta. Clients were recently given a copy of a book written by a member of the firm about estate planning "and then we talked to them about it." Ms. Stewart also has researched and written about women and finance, to give clients a tool to help them talk to their families about important topics.

"Looking at our demographic and realizing they have other interests allows us to create that deeper bond with them," Ms. Stewart says.

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Along with these new approaches, however, Cumberland still offers seminars on investing basics, as does Richardson GMP and RBC Wealth Management.

At BMO Harris Private Banking, vice-president and managing director Sandra Henderson says investor education is still crucial to clients, who "have shown that they want more information and they want to be educated."

In response, the bank runs customized programs, such as financial fluency for young people and investing for women. Attendance at some courses is reduced to keep them intimate. The bank also films seminars to put out as webcasts.

Mr. Maiorino's group offers events on planning for business owners and succession issues, among others. Some are open to the public but many are aimed at clients' own specialists, such as lawyers and accountants.

But too much information may not always be a good thing.

Clive Robinson, head of private wealth management at Morgan Meighen & Associates Ltd., an investment-management firm, says the firm's mantra "has always been consistent communication and that really remains the same." To that end, Morgan Meighen offers investment seminars and sets up private entertainment events, like theatre and ballet. The firm reports in great detail to clients quarterly.

But Mr. Robinson makes an important distinction between providing information and offering perspective.

With the Web and media bombarding investors, "clients have more access to information out there than ever before, but for many, that plethora of information is confusing."

"I think what clients are looking for is not necessarily additional information but perspective – how to interpret that information."

And that, he says, is why clients have advisers.

Canadian wealth by the numbers


Number of Canadian households with investable assets of more than $1-million at the end of 2010


Average assets of these 562,000 households


Number of households with investable assets of more than $1-million projected for the end of 2020


Number of households with $500,000 to $1-million in investable assets at the end of 2010


Average assets of those 594,000 households


Number of households with investable assets of $500,000 to $1-million projected for the end of 2020

(Investable assets exclude a household's principal residence.)

Source: Investor Economics

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