'I don't think of retirement in any practical sense of the word'
John Nicola isn’t thinking about retiring yet, but he’s continuing to work with his leadership team to hone the Vancouver-based Nicola Wealth for when he will take a step back in two years.
“I’m 72 and I’m still very interested and engaged in what I do,” Nicola, the chief executive officer of Nicola Wealth and chair of its Board of Directors, told Wealth Professional after winning The FP Canada Award for Lifetime Achievement in the Financial Planning Industry.
“I got to the point in my life many years ago that I don’t think of retirement in any practical sense of the word. So, my retirement will probably be driven by health-related issues if they come up in the future, which is something beyond my control.
“Since we – and the other shareholders – aren’t interested in selling the firm, we want to be sure that we have the management and leadership base to continue the company indefinitely as a stand-alone private enterprise. And we’re building a next generation team of people that are, on average, at least 15 to 20 years younger than I am.”
Nicola, who began the company in his 40s when he’d already been in business for 20 years, grew it from about eight people and $80 million in mutual funds and GICs to its current 488 staff and $13.7 billion in assets under management by working toward each milestone and determining how the company should continue to improve to grow from there. It had 200% growth in 2022 and is striving to reach $25 billion in assets under management by 2025.
Nicola is pleased with his team and board, and what they’ve accomplished. He’s particularly proud of Nicola Wealth’s “share the pie” value that his team routinely cites as a key philosophy.
“There are two things that ‘share the pie’ means to us,” he said. “You share the results, the outcomes of the business. You share them with your clients, your community, and your staff. If you do that really well, you’re going to get great results for your shareholders. But, you have to believe this is true. It’s a faith-based thing that we can now document that we know is true because of the evidence.”
Nicola is proud that the firm gave a percentage of its profits – $3.2 million – to a variety of organizations both within and outside of Canada last year. It also spent about $1 million sponsoring events for major organizations, and its individual shareholders contributed an additional $4 to $5 million to philanthropic causes last year.
“Philanthropically we are completely committed to being able to make a difference – at the community level in particular. So, that’s one thing I’m proud of,” said Nicola.
“The second thing is we now have, out of 500 people (staff), a little under 200 who are actually shareholders in the company,” he said, noting they ‘share the pie’ through profit-sharing and options. They now hold 55% of the company’s shares while he and his wife Claire own 45%.
While Nicola noted that they’ve been diluting the shares with more people acquiring them each year, “our 45% is now worth 300 times more than what 100% was worth when we started. For an RRI (return on investment), that’s roughly 27% a year, which is infinitely higher than any return we can make on investing. So, there is no dilution actually taking place because, if the size of the pie grows faster than your rate of dilution, then you’re not being diluted.”
Nicola would recommend that other businesses follow a similar model.
“If you want to build a legacy and you don’t want to get to a point where eventually you’re going to have to go to a business broker or investment banker to get your liquidity when you sell or basically say, ‘Okay, now I am out of a job and a career’,” he said.
“My model says, ‘I don’t want to be in 100% and I don’t want to be out of there, either’. So we’ve built an organization that really wants to get people who are committed to building it because they know that they’re sharing the pie. We’ve been doing this from day one when we opened our doors.”
Nicola’s model, and the rewards that its team is reaping, have allowed Nicola and his wife to support the non-profit and charitable organizations they wish, he said, “which means we can make that a bigger part of our lives as we get older, which is an important factor to us.”
It’s also meant that, given the strong team accomplishing goals, he’s looking at his future plans, too.
“I have the luxury and the honour of being able to lead that team at this point in time and, at some point in time in the future, there’ll be somebody else in that lead role. I’ll take a backseat, and I’m perfectly happy with that,” said Nicola.
“I am the CEO and the chair of the board, but I will likely be stepping down in a formal way as the CEO, certainly within the next two years. At least, that’s the plan, but I’ll stay on as the executive chair of the board,” said Nicola, noting that he has already scaled back a bit to spend more time with his family. But “then I come back to the team and make sure that I’m spending my time in the areas where I’m adding value and letting others have the responsibility of running those parts of the company that don’t require my attention.”
When applauded for his innovative thinking, Nicola chalks it up to having spent 50 years avidly reading the business ideas of such authors as Jim Collins, John Maxwell, and Stephen Covey.
“That’s been my personal MBA. It’s coming from having a library of people like that to read,” he said. “That’s made a difference in terms of what I’ve learned. I didn’t invent those leadership ideas. Somebody else put pen to paper. I just made sure I read them.”
