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Reasonable housing prices, low taxes and good jobs are fuelling migration to Alberta from other provinces. How can advisors capitalize on this client boom and help newcomers navigate the province’s peculiar economic cycles?
Angus Watt, senior wealth advisor with Angus Watt Advisory Group at National Bank Financial Wealth Management in Edmonton, who along with other the advisors quoted in this article are on The Globe and Mail and SHOOK Research’s Canada’s Top Wealth Advisors: Best in Province ranking, says his practice has clients coming to the province for the first time to start their careers or to retire.
And clients who started out in Alberta are capitalizing on remote work opportunities to return from cities such as Toronto and Vancouver, often for quality-of-life reasons as well as lower costs.
“People can still own a house here. You can have a job making $100,000 a year in family income and have a house and education,” he says. “Things are just a lot less expensive.”
The rise of virtual meetings means some migrants may initially stick with longtime financial advisors in other provinces. But those looking for a new financial plan as they embark on a new stage of life in Alberta will want a local advisor, Mr. Watt says.
New Albertans need to be aware of some financial wrinkles that are different from province to province, he adds. Tax rates and fees vary by province. Estate law is a bit different between Ontario, Alberta and British Columbia, so new migrants should revisit that aspect of their plan, says Mr. Watt. Probate fees, for instance, are low in Alberta.
While the lower-cost, more stable housing market in Alberta attracts migrants, it also means the windfall potential is limited.
“If you’re in Ontario and you paid $400,000 [for a house] and now it’s $3-million and you sell it tax-free – well lucky you. … That’s not the opportunity that you have here,” Mr. Watt says.
Understand why the client is moving
David Popowich, portfolio manager, senior wealth advisor and senior investment advisor with Popowich Karmali Advisory Group at CIBC Wood Gundy in Calgary, says clients tend to look for advisors who speak to their stage in life more than where the advisor is based – particularly now that meetings can be held virtually.
However, some clients are looking for face-to-face contact, he adds.
“Advisors should remain true to what their core business is, but they should be well versed on the differences that a person coming from B.C. or Ontario will face versus what’s happening in Alberta,” Mr. Popowich says.
“If a migrant is coming to Alberta because they’re retiring, they could come into our practice because there are some unique aspects we could educate them on [such as] the housing market, the difference in taxation, and the impact on their retirement plan.”
Advisors need to have a clear understanding of why a client is moving to Alberta, Mr. Popowich says.
New clients need to know energy prices are going to influence the province’s economic situation, he says, and if the client is moving for a job in oil and gas, that boom and bust cycle will have a bigger influence on the family than for a client moving from Vancouver for retirement purposes.
Be prepared for the unexpected
Even clients who aren’t from Alberta are familiar with boom and bust, says Trixie Rowein, senior portfolio manager and financial advisor, private client group with PAX Portfolio Advisory at Raymond James Ltd. in Edmonton. Divorce, job losses, and a pandemic all are examples of busts in clients’ lives.
She says the same advice pertains to busts of any kind – ensuring clients are prepared for the unexpected with manageable debt and liabilities, emergency savings, and some liquid investments.
Advisors in Alberta encourage clients to maintain diversity in investments and that goes for newcomers to the province. For those who are employed in oil and gas, there may be a temptation to overweight a portfolio in the industry.
“I don’t have too many [clients] who work in the oil and gas sector, but the few who do know their industry want to buy [energy stocks],” Ms. Rowein says.
“I tell them, ‘You can’t have more than a quarter of your portfolio in energy. If you want to have more than that you’re welcome to open an account with a discount brokerage and go for it.’”
She adds that her clients usually heed her advice.
In addition, advisors have to be up-to-date on economic and regulatory differences more now with the mobility of clients across Canada.
Ms. Rowein says she has clients who have moved to Ontario, Nova Scotia and B.C. while retaining her as an advisor, so she has licences in those provinces as well. Raymond James’s head office also provides information on details such as tax rates so she can do tax planning with far-flung clients.
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