For one advisor, who farms a little himself, his client base of agricultural Ontarians offer unique challenges and meaningful rewards
Andrew Ehgoetz calls himself a ‘junior farmer.’ By profession, he’s a financial advisor, specifically a senior financial advisor at Assante Capital Management Ltd. in Stratford, On. But he lives on the farm he and his wife run. During planting and harvest season he’s driving tractors and bringing in their corn, wheat and soybean crops. It’s a degree of hands-on experience that he believes helps him in his practice, given a significant number of his clients are farmers.
Ehgoetz spoke to WP about how he ended up as an advisor for so many farmers in Southwestern Ontario. He outlined the myriad unique challenges his client base faces and how he works to overcome those challenges for them. He explained, as well, why advisors seeking a growth opportunity may find it outside of city centres and in the vast tracts of farm country where people need financial planning.
“Over the last five years I’ve been seeing more farming clients as my wife and I farm as well, so I’ve been able to really gain some of that firsthand experience of what farmers are seeing,” Ehgoetz says. “When you look at agriculture I think there’s less trust for ‘the suits,’ and I think that just being able to chat with some of these individuals and understanding how they’re marketing their crops, gives me some more credibility. We’re living and breathing it too.”
Among the farming clients he serves, Ehgoetz says the number one challenge is succession planning. He sees situations among his clients where older generations are aging on the farm, without having spoken to the next generation about what the plans for a handover might be. Ehgoetz tackles those situations first by bringing the generations together for a more open and forthright discussion about what they’d like to do in terms of succession plans.
Read more: Changing firms after almost 30 years | Wealth Professional
Once there is a stated goal in mind, the challenge becomes one of tax and estate planning. Given the skyrocketing value of land, especially in Southwestern Ontario, handing over a farm means handing over potentially millions of dollars in equity. Ehgoetz brings in tax and estate accountants who are capable of finding the most efficient route to a handover.
When there are multiple heirs to a farming family, that can cause issues too. In many cases not every child is interested in taking over their parents’ farm, so Ehgoetz helps his clients’ families work out how to divide assets fairly. He has to ensure that the farming parents can transition their land and operations to the next generation, while retaining enough income to live on through retirement. He also has to make sure that the next generation that won’t be farming are given a fair share. “Fair isn’t always equal,” he says, of the solutions he helps client families find.
Sometimes farming families find that none of their kids are interested in taking the farm over. In those cases they’ll often sell the land and retire. When that happens, Ehgoetz has to help his clients navigate a pretty challenging transition, both into life off the farm and living off their investments. There is a great deal of education and care involved in that work, he says.
Read more: Are there seeds of private debt opportunity in the farming space? | Wealth Professional
The complexity of those challenges is some of what makes Ehgoetz’s work so rewarding. As is the joy of rural life where traffic is more likely to be waiting behind a tractor than getting stuck in urban gridlock. His work involves home calls and farm visits, meaning he sees the ins and outs of his clients’ businesses, the places they’ve spent their lives building. The AUM that comes with working for farming clients, too, is enough that advisors may want to consider a more rural focus in their practices.
If advisors are looking to grow their presence among farmers, Ehgoetz thinks that forthright conversations about succession and tax planning are key. Those conversations need to be backed up by a network of professionals, people capable of helping navigate the tax and estate issues that arise from farms.
“Find those subject matter experts,” Ehgoetz says. “We can do the financial planning, estate planning, investment management, but we’re not tax experts. Make sure you have people as a part of your team who can offer that service to your clients.”
