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Finding new clients to serve is critical to growing an advisory business, but financial planners and wealth managers aren’t interested in recruiting just anyone.
Paul Harris, partner and portfolio manager at Harris Douglas Asset Management Inc., says there’s a specific potential client profile that would best fit within an advisor’s growing practice.
He spoke with Globe Advisor recently about his vision of the ideal new client and how to attract those people.
How would you define the ideal new client?
We have always found it to be someone who’s a professional – and I use that term very loosely. It doesn’t have to be a lawyer or a doctor, just someone who is a professional in their field. It could be a plumber.
If you get those people usually around their mid-30s, they have already gone through a cycle in which their costs have increased slowly and are therefore not saving much, but they have many things that are actually valuable. They might own a house already, they might have a couple of kids. There’s stability to them as individuals.
What happens then as their cost curve starts to flatten out and ... if they’re young lawyers, accountants, or consultants, they’re probably at the stage at which they’re making more income and can put more money aside.
Why in their 30s and not even younger?
If you get a very young client who’s just starting out, they likely don’t have a lot of money to invest and probably don’t even want to invest what money they have because they’re using it to live their life. They aren’t very big savers.
For us, the ideal person is in that slot of their life at which their cost curve is flattening out and their revenue curve is starting to go up a lot more, so they can take that excess surplus and put it aside. That’s the kind of client you want.
Where do you find those ideal clients?
That’s a tougher question to answer. What we try and do is use the first level from a marketing perspective, [which is] have existing clients refer prospective clients to us. [That way], they’ve already had someone whisper into their ear that you’re very good.
The second level for young professionals is we try to use the digital vehicles they interact with, like LinkedIn. We do a lot of digital marketing through Facebook and other areas that allow you to connect with these people if you have content to give them.
That’s the way you can do it with younger people. You use the content you create at your firm to engage with them directly in some way, shape, or form.
This interview has been edited and condensed.
– Jameson Berkow, Globe Advisor reporter
Must-reads from Globe Advisor this week
Retirement boom raises concerns over advisor compensation
In an industry in which income is often tied directly to assets under management (AUM), experts warn advisors face an increasing conflict of interest in how they’re compensated as more baby boomers enter retirement and begin decumulation. As more investors enter this phase, one expert argues they will no longer be aligned with their advisors. Jameson Berkow reports on the challenges advisors face over compensation as their clients age.
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Low interest rates and stay-at-home trends gave home improvement and home and garden companies a big boost over the past two years. But their fortunes have changed in a climate of rising interest rates, falling house prices, and increasing economic anxiety. Shares of big box retailers Home Depot Inc. and Lowe’s Cos. Inc. have sold off more than broader market indexes despite good earnings this year. Adam Mayers looks at the outlook for the sector and where the opportunities lie.
Here’s why coveting a client’s superyacht will just bum you out
It’s one thing to recognize envy as one of the seven deadly sins, but another to know how to inoculate yourself against it. That’s especially so for those advisors who find themselves surrounded by their ultra-wealthy clients’ oceanfront homes, luxury cars and fine wine. Who wouldn’t want that opulent lifestyle? But it turns out that even advisors who work with average high-net-worth clients can feel envious, and unhappy. Kira Vermond looks at why advisors’ self-confidence and life satisfaction can take a beating, and how to overcome that.
Retiring advisors need more support from dealers and associations
The average advisor in Canada is reported to be more than 50 years old, so retirement is in sight for many. Yet, those who have already retired say dealers and associations could up their game in helping advisors navigate the complexities of retiring. Experts say retiring advisors need clear information about what they can and can’t do after they step away from full-time work. Alison MacAlpine reports on why experts say a checklist needs to be created for advisors to help them navigate the myriad processes that need to be done before retirement.
What you and your clients need to know
Smart and risky things people did with their pandemic savings
The current turmoil in financial markets presents a serious problem for the many people who poured their pandemic savings into investments. If these intrepid investors hold the line and wait 10 years to evaluate their success, they will almost certainly be happy with the results. But right now, they’re very likely questioning their decision to turn money stockpiled during pandemic lockdowns into stocks, bonds, funds and more. Rob Carrick breaks down the results of a recent survey that shows 38 per cent of respondents said their savings were in these securities.
Retirement-aged women are coming up with creative ways to supplement their income
Some Canadian women are finding creative ways to generate income past the traditional retirement age, often fulfilling personal passions in the process. The financial motivation to continue working post-retirement often comes from women living longer and typically having had lower lifetime earnings because of interruptions to care for children and aging parents. Even those women who are fortunate enough to have a pension are more likely to have gaps in contributions that are reflected in the final numbers when they hit 65 years of age. Wendy Haaf reports on the women who have taken on a new line of business.
Which of these 20 real estate names offer investors safety and value?
Rising interest rates, remote work, online shopping, COVID-19, supply chain issues, among other factors, have created headwinds across the general real estate sector. Sean Pugliese and Allan Meyer of Wickham Investment Counsel take a contrarian approach and analyze the sector using their investment philosophy focused on safety and value in hopes of finding some bargains. This includes both real estate corporations and real estate investment trusts that hold a variety of commercial, office, residential and industrial real estate, and more. Here are their picks of some Toronto Stock Exchange-listed names.
– Globe Advisor Staff