Top advisors reveal what it takes for those starting out in the industry

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Starting out in any established industry can be difficult when you’re new to the game, but there are strategies that advisors can use to get a head start – especially when they come from those who are recognized for excellence in the field.

The three advisors who topped The Globe and Mail and SHOOK Research’s inaugural ranking of Canada’s Top Wealth Advisors say those advisors who are just starting their careers should make great service the priority.

Jay Smith, portfolio manager and investment advisor at CIBC Wood Gundy in Toronto, David LePoidevin, senior investment advisor and senior portfolio manager with LePoidevin Group at Canaccord Genuity Wealth Management in Vancouver, and Elizabeth Petticrew, senior portfolio manager and senior investment advisor with The Petticrew Group at BMO Nesbitt Burns Inc. in Vancouver, say they all learned early on that investing in a big enough team – even if that means paying out of pocket to beef up the staffing their parent firms provide – is required to build a business with great service.

“When you start out, you have a quarter or half of a person [dedicated to helping you], and it’s pretty hard to build a business with that,” Mr. Smith says. “Working 70 hours a week and spending 30 hours typing labels isn’t working smart.”

He says advisors need to put money in the business, hire what they need, and make it a priority to bring money into the business.

Ms. Petticrew adds that in her third and fourth year in the industry, she lost some clients because she was so busy “working in the business instead of on the business” even though she had spectacular growth.

“If I had to do it again, I would’ve added additional service and we would’ve retained all the clients we gained,” she says. “I’m happy to have a team that is overstaffed, so that client service is always at the highest level possible.”

To that end, Mr. LePoidevin adds that young advisors should ensure their teams are adequate – even if it means taking money out of their own pocket to do so – because “serving the client is the best way of keeping the client.”

‘Wealth managers should be gardeners’

Mr. Smith says advisors need to realize the value of their services. Just because a client can get a service cheaper from another advisor, that doesn’t mean they can get it better.

“I look at myself as a Rolls [Royce], not a Hyundai … [I] don’t discount very often,” he says. “Almost everyone pays the same fees.”

The 35-year veteran of the industry values human contact particularly. And even though Mr. Smith says he has a great memory, documenting and keeping notes on every client meeting and decision makes sense “not to keep you out of jail, but to best serve your client.”

In terms of investment strategy, he says wealth managers should be gardeners, picking the weeds ruthlessly and nurturing the flowers.

“Keep the winners and sell the losers … I’ve watched people have a winner and they watch it go up three points and they sell it to report a profit to their client,” he says. “They have a loser and they watch it go all the way down to zero. You don’t get good returns doing that.”

It’s also important to be more flexible when you’re starting your career, he says, instead of being either a growth or value investor.

While advisors will always make some mistakes, sound diversity in portfolios will lead to success in the end, he adds.

“I get diversity of currency, market exposure in the kinds of companies, and value versus growth, all in one portfolio.”

‘Eat your own cooking’

Mr. LePoidevin says advisors shouldn’t be scared of rolling up their sleeves and doing hard work.

“Do your own research and do a lot of it,” he adds.

He still invests for the family of his first client from 1988. Client longevity doesn’t come from trying to get rich quickly and following trends.

“When you look at investment, you look at the asymmetric risk – how much could you make is a great question, but it has to be in conjunction with how much could you lose,” he says. “I’m absolutely thrilled in the last month that our portfolios have been unchanged and the go-to tech stocks just got crushed.”

Mr. LePoidevin adds that even though he’s very diversified in portfolios with country and stock allocation as well as asset classes, things can still go wrong.

“But the bottom line is that we’re much better than most. If you pay attention to that, you can build your book,” he says.

He says you should never put a client into anything you would feel isn’t good enough for yourself.

“We eat our own cooking and we own the same stocks that we own for our clients,” he says.

Don’t ‘let fear dictate’ investment strategy

For Ms. Petticrew, the wealth management business is built on relationships.

“It doesn’t matter how smart you are or how much you know about the market if you don’t have any clients,” she says. “I think you have to put your authentic self, not just your intellectual self, out there.”

Clients and prospective clients need to understand you and your team do not have a monopoly on wisdom. But, they also need to know you always have their best interest at heart and have a very disciplined investment strategy as the focal point of everything you do, she says.

Ms. Petticrew started in the business more than 30 years ago and says young advisors shouldn’t let fear dictate their investment strategy.

“I have seen advisors fail because, ultimately, they were too conservative and underinvested,” she says. “In this business, you have to believe that shares of high-quality businesses will outperform other assets over the long term.”

She says if you don’t have that conviction, you shouldn’t get into the business, because the minute there’s market volatility, you’re probably going to do “the wrong thing at the wrong time.”

Nevertheless, Ms. Petticrew says learning from mistakes is important, along with owning up to those errors.

“If you make a mistake in a client’s account, the first thing to do is pick up the phone and say, ‘I made a mistake and this is how we’re going to remedy it,’” she says. “Clients will likely sympathize with you for having to make that call.”

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