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This is a tale of two investors.
One receives guidance in silos from multiple advisors, stitching together different pieces of advice that may conflict. The other gets comprehensive wealth planning that provides a 360-degree perspective, encompassing investing, tax, estate planning and philanthropic advice.
The outcomes for long-term wealth could be radically different, even if the investment strategies are largely the same.
“Many investors are exclusively focused on portfolio performance, thinking the highest return possible is all that’s needed to build long-term wealth,” says Paul Rietkerk, a wealth advisor and client relationship manager at Nicola Wealth in Vancouver. “It’s not necessarily all about how much clients earn, it’s more about how much they actually take home.”
It’s why Nicola Wealth has built its reputation on taking the integrated approach for Canada’s most affluent families, entrepreneurs and professionals. Serving as a financial quarterback, Nicola Wealth constructs and oversees a unified wealth plan that ensures all advisors and financial assets work together toward a common goal.
“If you look at typical financial planning, it’s often only focused on investments and retirement. Integrated wealth planning is our strong suit,” says Cameron Smith, vice-president of Advisory Services and client relationship manager at Nicola Wealth in Vancouver.
This approach isn’t just an add-on in today’s environment of market volatility and changing tax regimes. It’s fundamental and increasingly necessary to ensure individuals achieve their financial goals.
Take those two investors. Maybe both of their portfolios are generating similar returns on paper. However, one portfolio is poorly constructed by failing to place investments in the right accounts to minimize taxation on returns. So that investor ended up with less net return than the other, who took the integrated approach and considered the greater plan.
The foundation of Nicola Wealth’s approach is getting to know clients and building open communication and trust. “When we first work with clients, meetings could be monthly as we work toward a detailed and customized wealth plan,” Mr. Smith says.
The importance of this process can’t be understated, Mr. Rietkerk adds. He says many clients can feel overwhelmed with the complexity of their finances. “To do what we do successfully, we need to deeply understand what our clients are trying to achieve with the resources that they have. Until meeting with us, typically no one has tied everything together for them in a comprehensive way.”
High-net-worth individuals have complex financial pictures. They may have operating businesses, holding companies and multiple properties, with goals that include charitable giving and ensuring their wealth can assist their families for generations. They need not only a wide range of advice, but advice that’s consolidated.
Our two investors illustrate what’s at stake. One has an investment advisor who may not be considering the client’s legal counsel and tax insights from their accountant. The consequence is a fragmented picture of wealth, leading to advice that’s not as relevant, or causing unnecessary inefficiencies that negatively affect financial outcomes.
The second investor’s plan thoughtfully considers all the complexities of their financial picture. Their integrated plan contemplates their entire net worth, identifies all assets and liabilities, estimates taxes payable now and in the future, and includes philanthropic aspirations that may be managed under a different mandate. True planning integrates multi-generational and family intentions, and ensures a retirement plan flows naturally into a legacy and estate plan.
“Tying these aspects together requires strategic and comprehensive planning, but not all wealth advisory firms take this holistic approach,” Mr. Smith says.
Each Nicola Wealth client works with two dedicated advisors with complementary skill sets, who bring experience with all the complex aspects of a client’s plan. Together, they build a bespoke, evolving wealth strategy. “Our wealth advisors are experienced in investments and planning, but they’re also well-versed in tax, estate planning and philanthropy,” Mr. Smith says.
This allows them to provide objective insights into client wills, powers of attorney, trust strategies and taxes. If something is missing from the plan, Nicola Wealth’s advisors can suggest bringing in another one of the client’s trusted advisors, or they can connect them with experienced lawyers, accountants and insurance specialists.
“That’s just another way we add value for our clients,” Mr. Smith says.
This type of integrated planning has fueled Nicola Wealth’s organic growth. The firm now manages $14-billion in assets, and much of that growth has come by word of mouth.
“Most new clients are referred to by existing ones,” Mr. Rietkerk notes.
New clients often come to Nicola Wealth stressed, struggling to understand their whole financial picture. That’s when the proficiency of the firm’s fee-based advisors shines.
“We’re not on the clock,” Mr. Smith says. “So, we really take the time required to figure out exactly what our clients need and build them a wealth plan that will achieve their goals. We provide a safe space for them to talk out ideas and tailor strategies for their unique needs.”
Ultimately, it’s not about how much you make, it’s about how much you keep. That’s the perspective of some of today’s best wealth-planning strategies. Nicola Wealth takes the time to integrate investments with a comprehensive financial plan, and strike the most efficient balance to grow and preserve capital. That enables its clients to be the wealthier of those two investors.
Nicola Wealth Management Ltd. (Nicola Wealth) is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions. All investments contain risk and may gain or lose value. Please speak to your Nicola Wealth advisor for advice based on your unique circumstances.
