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Blog Post

April 23, 2018





I spend a lot of time researching info and purchasing studies of the Financial Advice Industry especially referring to the US. The US is a fantastic leading indicator of what will happen in Canada. From this info I feel very comfortable with the following opinions concerning the business models of advisors.
Consider the following trends in our Industry:
  • CRM2 and a movement to a fee based compensation model
  • In fact; a movement to 100% transparency of ALL client costs including those of the manufacturer – mutual funds, proprietary products, etc.
  • Downward pressure of fees / commissions and an increase in Dealer’s fees
  • Advisors are seeing their grid get cut
Consider the evolving expectations of clients:
  • Clients are expecting Holistic financial planning including estate and wealth transfer
i.e. Expect more advice from their advisor
  • As clients age they are expecting their family to become more involved with the decision making process
  • Business owner clients expect their advisors to be involved with the succession planning process of their business
  • Expecting more for less
Advisors? Keep up with changes or risk losing the value of your business:
  • Increasing costs – declining revenue streams – more demand on time
  • Selling all products to all people no longer a viable or valuable business model
  • More technology needed to keep up
  • Traditional sales / prospecting methods don’t work
Solution – Become a Relationship Manager:
  • Specialize in one product and/or change business model to a Wealth / Relationship Manager
  • Work with specialists – Portfolio Managers, Insurance Specialists, Accountants and Lawyers etc (some even have Chartered Business Valuators work with clients for succession planning)
  • This business model gives the advisor more time to develop relationships with clients and prospects and achieve all the objectives of CRM2 and the evolving expectations of your clients
  • This is the fastest growing and most successful business model in the US
The Benefits of working with an Investment Counsel Portfolio Manager:
  • 100% transparency of fees
  • Possible direct tax benefits
  • ICPM responsible for KYC, risk assessment, paperwork, etc.
  • Fiduciary responsibility not just appropriate product recommendations (Big difference and a huge selling feature for clients)
  • All investment products available including risk adjusting private equity investments
  • ICPM s have both education and experience requirements that advisors do not require PLUS need provincial securities regulator approvals
  • Advisor does not have to be licensed with a Dealer
Queenston has worked with financial advice businesses totalling in excess of $75 Million over the last 5 years. Queenston is the premier merger and acquisition specialist in this space. If you need more information on any of these issues:
  • Valuations
  • Continuation Plans
  • Succession Plans before an Exit Strategy
  • Acquisition Model
  • Dealer to Dealer
  • Transition Consulting
  • Selling your business

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