Skip to main content
leadership lab

Wealth-management adviser, author of Recalculating – Find Financial Success and Never Feel Lost Again.

Being recognized for good work has served me well in my career as a financial adviser, especially now with dramatic changes brought on by new regulations and by the introduction of low-cost robo-advisers.

New rules requiring more disclosure to clients about adviser fees and invesment performance – known as Customer Relationship Model 2 (CRM2) – are a big change in the industry. If you have an account with an investment firm, brokerage or mutual fund firm in Canada, you are already receiving account statements showing information that wasn't there before. You know how much your adviser and their firm are making from you, and can keep better track of your account's performance.

Every business must come to grips with new ways of doing things. Sometimes, as with CRM2, it is mandated by compliance regulations. But sometimes it comes from new, aggressive competition armed with advanced technology and a fresh approach.

Uber revolutionized the taxi and delivery business, and Expedia changed how to buy airline tickets. Today, every industry is being turned upside down, so you must embrace change to survive.

Providers in the financial industry want to deliver value that exceeds the cost customers pay. I can buy a car that costs $20,000 or $100,000, or a coffee that costs $1.50 or $5. People regularly buy one or the other and sometimes both. However, value is different than price, because price might be a number, but value is a perception.

The challenge is how to succeed when clients focus on price and recent account performance, at a time when both those things are widely promoted by regulators and competitors.

Many younger players and clients in the industry today are targeted by robo-advisers who compete on low prices and a transparent investment process. They are gaining a foothold just as regulators push for greater awareness on embedded costs and portfolio outcomes. This is a perfect storm for advisers to navigate, but depending on how they react, it can be a death knell or a golden opportunity.

Embracing change lets us adopt what is new – such as new regulations and new software tools – while focusing on timeless values. For example, advisers know that self-directed investors usually experience poor returns because they think constantly changing a portfolio to fit the turns of the market is vital to success. It isn't. Portfolios may have new technology to manage them but are still owned by people who make the same mistakes.

In fact, the best investor performance comes from doing little. An old joke among brokers is that a portfolio is like a bar of soap; the more you touch it, the smaller it gets. A robo-adviser can provide a great portfolio but can't persuade you to hang on to it, and holding over time is key.

People hire advisers to remove the complexity of investing. They want our experience, wisdom, and service. While good advisers stay current with markets and trends, the most important thing is building relationships with clients and solving their problems.

Successful products and services aren't really about the item for sale, but the customer solution. Starbucks sells coffee and offers a place to hang out where you can work or study. Uber doesn't replace a taxi, but is a better way to get someone or something to another place. Winning companies solve client problems and make the complex easy.

In our business, a prospective client asks about fees, returns and services, but really wants us to solve their problem, so we have to find what it is – whether it's how to pay off their mortgage or how to finance their children's education.

One way to do this is to make their financial plan a process, not an event. We used to spend hours with a client – collecting financial data, discussing goals, balancing priorities, and identifying obstacles – then do an analysis and run projections considering everything from their investments to tax strategies and estate planning. All this went into a binder, but no one read it and soon it was out of date.

Today, we don't produce volumes of reports. We create a customized road map that may take two years for the client to complete. Then we start over again with a new challenge or goal. The client only needs to focus on what's important and when.

In this quarter, we may look at their key tax-planning moves. Next quarter, it may be updating their insurance coverage, and the one after that maximizing their kid's registered education savings plan. As the adviser, we keep track of details and integrate everything, only now we charge fees, not commissions. The key is to show them the full planning roadmap and have them participate one step at a time.

Business leaders today understand that you must sell benefits and solutions, not products and features. Still, clients have to see the work to appreciate this value. The best people in business prosper by using external change to become better, do more, and get closer to their clients.

Executives, educators and human resources experts contribute to the ongoing Leadership Lab series. Find more stories at and follow us @Globe_Careers.

‘Within innovation you have to be ready to win and to get half-successes’

Special to Globe and Mail Update

Interact with The Globe