By Paul Gleeson, BBS, QFA
IN THIS ISSUE: When starting the search for financial advice and wealth management, it’s hard to know what exactly to look for. Everyone wants an intelligent, knowledgeable and capable individual, but what makes for a true financial advisor? What qualities can one identify that highlight the best advisors to raise them above the crowd? In this issue of Tactics, we welcome Paul Gleeson, the newest member of our Planning Team, as he recounts his path from Ireland to Vancouver and how he distinguished Nicola Wealth Management as the firm he wanted to join.
Throughout our lives, we all have various moments in time when we are faced with a significant decision that will have a major impact on our lives. In his poem, The Road Not Taken, Robert Frost describes such a situation where “two roads diverged in a yellow wood”. About 18 months ago, I found myself at such a fork in the road. My dilemma was that my Canadian partner of five years wanted to return to her homeland, but we were at the time living and working in my native land of Ireland and I was enjoying my time as a financial advisor with arguably the top advisory and wealth management firm in Ireland.
From a business perspective the timing couldn’t have been worse. I was working with a fantastic firm, had a great portfolio of clients whom I loved advising and over the coming years I would have earned an equity stake in the firm myself – so all in all things were looking pretty good. The road less travelled for me, in this instance, involved a one-way ticket to Vancouver to begin a new chapter of my life with my partner, Tori, in Canada. My choice was simple: stay in Ireland, continue doing well in my business and say goodbye to Tori, or follow my heart, kiss my equity in the firm goodbye and take a chance on Canada – no prizes for guessing which choice I made!
When I arrived in Canada, I began investigating how the financial planning and wealth management industry worked here in Vancouver. Which firms were independent, who did what, and above all else, which firms had good reputations? My mindset was simple – find a firm that I would like to be a client of myself and apply for a position there. If I could find a firm I would recommend to family and friends (if they were living in Canada), then that is the place I want to work.
A month or two into my search, I had met some fairly good people and some of them had even offered me a job. However, I just wasn’t 100% satisfied that these firms ticked all the boxes for me. Remember, I had absolutely no bias whatsoever in this search; I was simply trying to find the best possible financial planning and wealth management firm. So to anybody who is reading this article and looking for a new advisor, I can empathize with you, because I, too, was in a similar position when I began my search earlier this year.
Obviously, you will decide what matters to you and your family when choosing a financial advisor, so it is not my place to tell anybody what they should or shouldn’t look for. But what I would like to do is share with you some of my own search criteria and what I looked for in a financial advisory and wealth management firm.
So what exactly was I looking for?
A firm of real financial advisors! It’s that simple. Or is it?
Well, in theory it should be that simple. But unfortunately in today’s market, there are many people out there who say they are financial advisors when in reality they are investment advisors or mutual fund salespeople.
Personally, I have no problem with either, but I most certainly do have a problem with these sorts of people proclaiming to be something that they’re not, i.e., a real financial advisor.
As far as I’m concerned, a real financial advisor is somebody who takes a holistic approach to your finances. It is somebody who considers everything in your financial world from your compensation strategy, tax planning and the risks to your financial independence, right through to your investment portfolio, asset allocation, retirement projections and estate planning needs. A real financial advisor is paid by you and works for you and you alone. In my view, there is no middle ground here. You either do the job right or you don’t. So let’s get down to what I would look for from my financial advisor.
In my opinion, a top class advisor has the ability to really listen.
They will take the time to learn about me, my personal circumstances and my financial goals and objectives. This may sound like I’m stating the obvious, but hearing and proactively listening to a client are not the same. I want somebody first and foremost to listen to me – there is a reason we were given two ears and only one mouth.
I also want impartial advice from my advisor. If you seek financial advice from an advisor, there are two basic ways to pay for it:
- The advisor gives you the advice for free and then gets compensated by means of a commission on a product they sell you, such as a mutual fund or an insurance policy.
- The advisor charges you a fee for the advice based on their time input. When you receive advice in this manner, it doesn’t matter to the advisor whether or not you actually implement their recommendations or buy any products from them. He or she has been paid for their time and you have received the best possible advice that is bespoke to your own personal situation.
I want an advisor who is working for me, not for a bank or mutual fund company; therefore, I want an independent fee-for-service advisor as described in the second scenario above. I want to ensure that the advice I am getting is completely impartial and I am happy to pay a fee for this advice.
Think of it this way: let’s say you have a choice to go and see one of two doctors. The first charges you a fee for your checkup; the second does the checkup for free, but gets paid a commission by the drug company if they write you a prescription. If you go to see doctor number two, how sure will you be that you really need the prescription? If you don’t buy the medication via the doctor’s prescription, they won’t be paid for their time. Obviously, this would be a ludicrous situation and doesn’t exist in the medical field, yet people do this every single day when it comes to their financial advice.
It is imperative that my financial advisor takes a holistic approach and considers everything in my financial world. I want somebody who will integrate all areas of my finances to ensure the best possible outcome for me and my family. A practical example of this would be combining certain aspects of my insurance needs with certain aspects of my investment portfolio. Integrating these two areas can lower my cost of insurance while increasing my portfolio’s rate of return with no additional risk. This is a simple example of how a holistic approach benefits me as a client.
This next point may seem like I’m stating the obvious again, but I want my advisor to be goal driven. I want them to do everything in their power to ensure that I achieve my financial goals. I don’t expect to spend a few hours with an advisor, have them wave their magic pen and find all my financial concerns are addressed. I know that it will take years of working with a top class advisor to achieve my goals. I also know that my goals and objectives are likely to change over the course of my life. Furthermore, the advice that I receive today may need to be altered at some future point because of tax and legislative changes as well as investment trends. So I want an advisor who has long-term relationships with their clients – I’m not interested in dating.
I’m seeking an advisor who is capable of integrating all my financial structures to minimize my tax liability. Generating income and creating and managing wealth are two completely different disciplines. The single biggest financial liability that we all face, and one that stands in the way of personal wealth, is tax. Therefore, it is imperative that one’s financial affairs are structured as tax-efficiently as possible and this, in my opinion, can only be achieved through a holistic approach to financial planning. I cannot emphasize this point strongly enough. Take your investment portfolio for example: your after-tax rate of return can erode dramatically if the portfolio is not properly structured for tax-efficiency.
The ability to be different and not follow the crowd is something I would look for in my financial advisor. I look for this because an advisor who follows their own path can only do so if they are very skilled, and that is the type of person I want in my corner. If you look at high achievers in any discipline (elite runners, golfers, investors, business people etc.), they all possess an ability to think outside the box, be innovative and go the extra mile to achieve their goals. These people often see things differently than most and go their own way. They don’t ask whether or not something can be achieved, instead they ask how it can be achieved. They have a natural presumption of success; it’s just a question of how best to accomplish it.
I want my financial advisor to achieve good returns consistently with my hard-earned money and get me into private deals and opportunities that I won’t see in the standard retail world. I am not interested in walking into a bank and buying retail mutual funds that everybody else buys, because I do not want the results that many people get from these types of investments. I want more for me and my family than that. I want an advisor who can show me a track record of earning good returns for their clients.
I want my advisor to be somebody who genuinely cares about me and my family. My financial adviser doesn’t need to be my best friend and we don’t have to spend our weekends together, but I intend to work with this person for a long time, so I want them to take a genuine interest in helping me achieve my financial goals. I think somebody who does take a genuine interest in my financial well being will by default give me very high service levels. I want an advisor who is proactive, who returns my calls promptly and pays attention to the detail of my financial planning and portfolio management. Somebody who can explain technical issues to me in language I can understand.
When you add all these things together, you should arrive at an advisor who gives you real peace of mind. At the end of the day, this is what most people want when it comes to managing their money. In my opinion, you only get true peace of mind if your advisor can tick all of the other relevant boxes mentioned above.
While I have listed many qualities here that I would personally look for in a firm of advisors, you may have additional qualities to add to this list and may begin to think it impossible to find all of these qualities “under one roof” so to speak. Are we being too demanding here? Absolutely not. You have worked hard for your money and you should demand excellence from your advisors so that your money is working just as hard for you.
Rather than name specific firms, on the following page I have summarized the main types of companies that I considered in my search for a real financial advisor. I have also commented on whether or not I felt they were able to deliver on what I was looking for. Given that you are reading this newsletter, I suspect you will not be hugely surprised to learn that the firm which ticked all the boxes for me was Nicola Wealth Management!
The table below compares my view of Nicola Wealth Management with other potential sources of financial planning and investment advice.
So what do you think? Are we delivering on what we say we do? Are there areas we can improve upon? Is there something we are not giving you, our client, which you would like to see us provide? The most important opinion on what we do comes from our clients, so if there is an area that we can improve upon please let us know – we want to hear about it.
As for me, after four months of searching and several interviews, I was satisfied that I had found my place in the financial world of Vancouver. I went to see John Nicola and, luckily for me, I was asked to join the firm in April of this year. My time with Nicola Wealth has confirmed my initial research: that I am working with a top quality firm that takes enormous pride in the work we do with clients; a firm that does not follow the crowd, does things a little differently, and goes that extra mile for its clients and their families.
Like Robert Frost, I too have taken the road less traveled and I know it will make all the difference — especially when it comes to my own personal wealth accumulation.