Wealth planning is many things: generating enough capital to retire comfortably, and also building legacies and helping others when you’re gone. In short, it’s about continuity. Yet, for many financial advisors and their clients, continuity has another critical dimension.
As they focus on guiding clients through retirements and wealth transfers, many advisors are in the early stages of transitioning out of business themselves. One report from Advocis found that more than half of advisors were aged 55 and older. So, how can advisors help ensure that their clients will continue to have the guidance they need while undergoing a multi-year wealth transfer to their spouses, children and grandchildren?
One solution could be working in an environment that takes a multi-advisor approach to handling clients. That’s what Nicola Wealth Management Ltd. (Nicola Wealth) does with its two-advisor/one-client model.
This approach provides continuity of advice to serve individuals and their families from one generation to the next.
It’s pivotal to always have a familiar face sitting on the other side of the desk, says David Chalmers, senior wealth advisor and portfolio manager at Nicola Wealth in Vancouver.
“If you have a doctor who’s 70 years old, you might start to wonder when they’re going to arrange for a younger doctor to take over the practice. It’s the same with your advisor whose trusted advice you’ve leaned on for years, if not decades. I want to make sure clients are taken care of when I ultimately do decide to step off the stage,” says Mr. Chalmers, a veteran portfolio manager now in his 70s.
Every wealth management firm tends to deal with advisor retirement a little differently, says Cameron Smith, vice president of advisory services and client relationship manager at Nicola Wealth. “If it’s a really successful advisor at a large firm, management may decide who the succeeding advisor will be.”
Independent advisors, in contrast, will often sell their client book to an advisor who aligns with their wealth management philosophy.
Nicola Wealth’s two-advisor model is different Mr. Smith says. “When you have two people working on a client’s file, it often leads to a more fulsome ongoing outcome, including when one of the advisors is ready to retire.”
For Mr. Chalmers, the two-advisor model has allowed him to work with younger advisors, mentoring them over several years while handing over more client service responsibilities gradually.
It’s not a one-way street, he adds. Up-and-coming wealth professionals bring fresh perspectives to wealth planning and often excel at leveraging new technologies that can enhance the client experience.
The model doesn’t always include a senior-junior advisor duo. Nicola Wealth builds two-person teams through partnerships that advisors develop organically through regular meetings. They get to know each other’s strengths, areas of expertise and potential synergies that could help clients.
“It’s an open market of ideas, insights and partnerships,” Mr. Smith says.
Advisors aren’t assigned a partner. They can pick and choose different advisors to work with for different clients.
“It’s not just a one-size-fits all solution with an advisor coming in for the entire book of clients for another advisor,” he says.
It’s about finding the right fit in each case, based on client preferences and needs, such as requiring subject matter expertise in retirement income planning or estate planning.
All advisors meet with Nicola Wealth’s management team regularly to get a sense of their long-term plans, particularly with respect to their retirement.
“If retirement is something they’re contemplating, we encourage them to let us know several years in advance,” Mr. Smith says.
That allows Nicola Wealth to establish a long runway for seamless transitions. It’s an ongoing, regenerative process, which happens with client approval and is part of the fabric at the firm. That doesn’t always happen in the industry says Mr. Smith, pointing to a recent example with new clients.
“Their [former] advisor was retiring, and they weren’t given any choice. They were informed their advisor’s son would take over,” he says. “This is a couple approaching retirement being told someone in their 20s will manage their wealth.”
That wouldn’t happen at Nicola Wealth, where the two-advisor model offers clients a choice in such transitions.
“Even more importantly, it leads to stronger, better outcomes overall when there’s a team working together with a collective passion for providing a great client experience,” Mr. Smith says. “That’s the greatest benefit of the two-advisor model.”
