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Eleven years ago, Dylan Reece and his partner, David Chalmers, had a profitable financial advisory practice, but they were looking for more than their firm could provide.

Specifically, to better achieve their clients’ objectives, they needed access to a more sophisticated investment platform that included alternatives to traditional stocks and bonds. They also had a strong entrepreneurial desire to contribute to building something bigger than their individual advisory practice. And it was very important to them to align their practice with an independent, fee-based firm even though, at the time, most of the industry was still following a commission-based model.

After speaking with several firms, Reece says it became apparent that one of their most formidable competitors, Nicola Wealth, was offering something different that matched the pair’s wish list. Now a Wealth Advisor | Client Relationship Manager with Nicola Wealth, Reece explains why he made the leap to a new firm and how it has benefited his clients and his practice.

What made you decide to join Nicola Wealth?

We were attracted to Nicola Wealth’s pension-style investment platform because it goes beyond public assets to encompass private assets such as hard asset real estate, venture capital, private equity, private debt and commercial mortgages. This model was showing positive results then, and now has a track record of over 22 years of generating historically consistent and stable returns.

In addition, as we surveyed the landscape of wealth management in Canada, few firms were providing clients with comprehensive, sophisticated financial planning. Many claimed they offered planning, but it wasn’t their key focus. If anything, they used it as a loss leader, but to us, it’s the foundation of the wealth creation and preservation process. We really value how Nicola Wealth puts financial planning front and centre.

Nicola Wealth also stood out for its comprehensive client reporting. Even in 2011, they offered transparent reporting on portfolio returns and fees and tax reporting for accountants. Today, clients have access to their own personal online financial vault, which includes real-time portfolio metrics, a net worth statement, retirement projections, tax returns, wills and other legal documents.

Finally, they were the only firm willing to exchange the value of our practice for shares in Nicola Wealth. I knew back then that most of my net worth would ultimately be in the equity of the company, so that was critical.

What was the onboarding process like? 

Moving a practice to another firm is a significant endeavour, but it went smoothly thanks to the dedicated new accounts team that helped with all the paperwork and the IT team that transferred information from our old customer relationship management (CRM) system to the Nicola Wealth CRM. We had direct access to the chief investment officer and portfolio management team so we could do a deep dive into the various investment mandates and pools. And the trading team executed trades to facilitate the transition of existing client portfolios to Nicola Wealth models over a period of about six months.

How did you make sure your clients came with you?

We had been working with many of our clients for a decade or more, so we had confidence in our relationships. To explain our decision to move, we wrote a letter to each of our clients and then, over about four months, had one or more meetings with them. We emphasized the benefits they were going to get from moving to Nicola Wealth, including diversified investments, more comprehensive planning and what we felt was better reporting. It was necessary for us that this move was, first and foremost, a benefit to our clients – not just a benefit to us as advisors. In the end, more than 95% of our clients came with us, which was a great result.

How does Nicola Wealth support your practice’s ongoing growth? 

We’ve been fortunate to experience significant growth since joining Nicola Wealth. One of the most important factors contributing to that growth has been the ability to leverage a collaborative platform. Centralized teams – such as asset management, operations and marketing – free up the advisory teams to do what we do best. They allow us to concentrate on building trusted relationships with clients and helping them create a financial plan which aims to achieve what’s important to them and their families. Because we have that targeted focus, approximately 75% of all our new clients now come from referrals of existing clients, and we currently have a 99% client retention rate. We also currently have a net promoter score over 80, meaning that all our clients are satisfied or better with our service.

Also, the firm has always supported my professional growth. All partners are encouraged to work on the business, rather than just in the business. I’ve had opportunities to participate in committee work, take on leadership and mentorships roles, help build technology and tools, and give back to the community through charities. Wearing many hats within the organization is what being an entrepreneur is all about.

What advice do you have for advisors who are considering switching firms?

It’s obviously a major decision and, as a steward of clients’ wealth, it’s not something to take lightly. It’s essential to share the culture, vision and values of your firm – that can’t be forced or faked. Also, there are often financial incentives for advisors to make a move, but I think to be worth the switch, the new firm needs to provide clients with a material improvement in their experience, services and results. If the client is the clear winner, the rest will take care of itself – financially and otherwise.

I think it’s important to add that Nicola Wealth isn’t the right fit for all advisors, and all advisors aren’t the right fit for us. We tend to attract entrepreneurial advisors with a drive and desire to be an owner who collectively builds a business that goes well beyond their practice. We believe our best work comes from partnerships, not silos. And we’re driven to continuously learn, improve, and find new and better ways to serve our clients and our communities.

Together, we want to provide thought leadership to our industry and build the gold standard for asset management and financial planning in Canada.

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About Nicola Wealth

Nicola Wealth is a wealth management firm dedicated to serving the complex needs of high-net-worth families, entrepreneurs, and professionals. Today, the firm operates offices across Canada advising institutions, foundations and multi-generational families. Nicola Wealth is responsible for over $11.5 billion in assets under management (AUM), investing in a wide range of asset classes including public and private assets including institutional-grade real estate, private equity, private debt, commercial mortgages, among others. For more information, please visit www.nicolawealth.com. 

This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only.  Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.

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Providing access to a broad spectrum of investments and holistic planning are key to retaining clients during periods of market volatility.

Breadth of investment choice and advice drives client retention at Nicola Wealth

Through a period of intense public market volatility that rattled many investors’ nerves, Nicola Wealth has maintained a client retention rate above 99% – and above 99.9% through the first half of 2022. Important contributing factors, according to Cameron Smith, vice-president, advisory services, are access to a wider than usual pool of investment choices and a commitment to helping clients with aspects of financial planning that go well beyond investments.

“We have a unique approach to our work with clients,” says Smith. “The end result [is] we’ve hardly lost any clients at all, and we are continuing to onboard clients at a very strong pace.”

Traditional asset allocation blends publicly traded equities and bonds into a portfolio that matches an investor’s goals, risk tolerance and time horizon. However, Nicola Wealth offers broader diversification into assets that don’t fully correlate with either equities or bonds and can provide additional stability when public markets get turbulent.

“We do have positions in publicly traded fixed income and equities, but we also provide exposure to hard asset real estate, venture capital, private equity, private debt, commercial mortgages and other investment strategies,” Smith says. 

At points in the past, bonds have been a safe haven when equity markets were shaky – but that’s not true at this time as interest rates are rising. There’s also the inflation wild card. 

Smith stresses it’s very important for advisors to have access to diverse products that can soften ups and downs and maintain income streams because this has the potential to dramatically improve clients’ investment results and satisfaction.

“Our exposure to assets that are truly diversified – and many of which generate consistent cash flow – has allowed us to deliver consistent returns, and many of our clients have experienced, at this point in time, positive returns so far this year, which is unique in the Canadian investment space,” says Smith.

Offer more than investments to build loyalty

Another effective way to build loyalty with clients is to treat investments as just one part of a comprehensive financial plan.

“We are unapologetic about our approach to planning. It is the way we lead all of our discussions,” Smith says. “We spend a significant amount of time just getting to know our clients. What is their current situation? Where are they hoping to go? Is their tax planning as efficient as it can be? Are there philanthropic aspirations? How do they transition wealth to the next generation?” 

Holistic planning gives context to investment discussions – both when deciding where to invest and when reviewing returns. It also provides an opportunity to, for example, save money through tax planning to balance out periods of negative investment performance. 

“The historic stability of our approach, when you combine our investment philosophy and diverse investment platform with that approach around financial planning and putting the client and their family at the centre of it all, has historically led to some very good client outcomes,” says Smith.

In general, Smith has found that a certain type of advisor gravitates toward this way of working with clients. They’re often driven, dedicated to their craft, looking to evolve and get better – and, critically, enthusiastic about collaboration. 

That last one is important at Nicola Wealth because many client files are managed by two advisors who work together and with wealth planning associates to help drive the best outcome for each client. Collaboration is also reinforced by the ownership structure of Nicola Wealth Management, with advisors given the opportunity to participate as shareholders in the firm. 

“If I am an owner in the firm or participating in the profits of the firm, I want to see my colleague down the hall be just as successful as I am. And that new person who’s just come through the door? I want to spend time mentoring them, getting them up to speed, because it’s one thing if I can drive results as a single contributor, but if seven or eight or 10 people that I can influence can also drive those same results, there’s a massive compounding benefit to everyone involved,” says Smith.

The other place where collaboration is front and centre is the onboarding process, during which advisors are set up with two or three sponsoring advisors who provide mentoring and support. New advisors are also connected with a support pod of three additional peers who broaden the new advisor’s community within the firm and make themselves available to answer any and all questions.

“That collaborative spirit with fellow advisors in the firm never goes away,” Smith emphasizes, even as the structure around it lifts once an advisor is up and running and feels comfortable. “We describe our culture as ‘sharing the pie,’ and a big part of it is sharing your thought leadership, your effort and your knowledge with your colleagues.” 

Cameron Smith Vice-President, Advisory Services, Nicola Wealth

About Nicola Wealth 

Nicola Wealth is a wealth management firm dedicated to serving the complex needs of high-net-worth families, entrepreneurs, and professionals. Today, the firm operates offices across Canada advising institutions, foundations and multi-generational families. Nicola Wealth is responsible for over $11.5 billion in assets under management (AUM), investing in a wide range of asset classes including public and private assets including institutional-grade real estate, private equity, private debt, commercial mortgages, among others. For more information, please visit www.nicolawealth.com. 

This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.