Rather than CRM2 or fee pressures, there are more serious issues advisors should worry about
Elie Nour, head of Nour Private Wealth with Manulife Securities, shares his thoughts on the biggest challenges that Canadians are faced with, and how advisors can step up to provide the help they need.
What do you think are the most significant challenges that clients are facing today?
I believe that the biggest challenge clients are facing today is the lack of proper planning. Younger clients are more concerned with high debt levels and job insecurity while older clients are more concerned with outliving their savings and declining health that would require long-term care and thus higher costs.
Proper financial planning is necessary for all different stages of life. It is a holistic exercise that looks at your broad financial situation: income, tax rate, assets, liabilities, cash flow and saving rate, inflation, a “realistic” and conservative rate of return … and then maps out a way to achieve your goals. A good financial planner is the one that asks their clients the right questions, some of these questions might go beyond the numbers to further understand the client’s goals and dreams.
No plan is carved in stone. Circumstances change: a new addition to the family, health deterioration, death, loss of employment, inheritance, market correction… all of which have an impact on your financial situation. A plan should be reviewed on a regular basis, say annually, but altered as soon as major unforeseen changes occur.
Do you think most advisors have been able to keep pace with the demands and needs of their clients? Why?
The industry has changed a lot over the past few years. Clients’ needs have changed as well. Given that clients can no longer expect the high returns of previous years, the implementation of CRM2 (leading to better disclosure and more transparency of fees), advisors will find it more difficult to grow their practice without any differentiation in their value proposition.
Today, clients need and demand more than just a money manager. Clients are looking for a qualified advisor that can provide guidance in areas such as tax and estate planning — an advisor that can be trusted and that has knowledge to handle complex financial issues.
From your standpoint, what else could financial professionals do to effectively help?
I recommend that instead of choosing the easier path and lowering their fees, financial professionals should work on establishing themselves as wealth managers and build a compelling value proposition. Advisors should focus on developing a unique brand that captures all the services they provide to their clients. Earning a CFP certification, as an example, is key for financial professionals looking to differentiate themselves and improve the quality of advice they offer to their clients. You must show your clients that you are not like other advisors. You need to stand out.
You might have knowledge or certain qualities that will set you apart. If you speak French, Mandarin, or any other language other than English, that could be an advantage.
If language is not what differentiates you, then expertise and specialization in a niche market might. As an example, you can focus your practice at helping dentists and other medical professionals understand the tax and planning issues they will face when retiring or selling their practice. Another example would be to help families with a child that has a disability. You can become an expert in RDSPs, Henson Trusts, QDT Trusts, Lifetime Benefits Trusts…. The list goes on and on.
Whatever you do, differentiate yourself and make sure your clients understand your uniqueness.
Related stories:
From industry outsider to industry leader
Why investors might be focusing on the wrong signals
What do you think are the most significant challenges that clients are facing today?
I believe that the biggest challenge clients are facing today is the lack of proper planning. Younger clients are more concerned with high debt levels and job insecurity while older clients are more concerned with outliving their savings and declining health that would require long-term care and thus higher costs.
Proper financial planning is necessary for all different stages of life. It is a holistic exercise that looks at your broad financial situation: income, tax rate, assets, liabilities, cash flow and saving rate, inflation, a “realistic” and conservative rate of return … and then maps out a way to achieve your goals. A good financial planner is the one that asks their clients the right questions, some of these questions might go beyond the numbers to further understand the client’s goals and dreams.
No plan is carved in stone. Circumstances change: a new addition to the family, health deterioration, death, loss of employment, inheritance, market correction… all of which have an impact on your financial situation. A plan should be reviewed on a regular basis, say annually, but altered as soon as major unforeseen changes occur.
Do you think most advisors have been able to keep pace with the demands and needs of their clients? Why?
The industry has changed a lot over the past few years. Clients’ needs have changed as well. Given that clients can no longer expect the high returns of previous years, the implementation of CRM2 (leading to better disclosure and more transparency of fees), advisors will find it more difficult to grow their practice without any differentiation in their value proposition.
Today, clients need and demand more than just a money manager. Clients are looking for a qualified advisor that can provide guidance in areas such as tax and estate planning — an advisor that can be trusted and that has knowledge to handle complex financial issues.
From your standpoint, what else could financial professionals do to effectively help?
I recommend that instead of choosing the easier path and lowering their fees, financial professionals should work on establishing themselves as wealth managers and build a compelling value proposition. Advisors should focus on developing a unique brand that captures all the services they provide to their clients. Earning a CFP certification, as an example, is key for financial professionals looking to differentiate themselves and improve the quality of advice they offer to their clients. You must show your clients that you are not like other advisors. You need to stand out.
You might have knowledge or certain qualities that will set you apart. If you speak French, Mandarin, or any other language other than English, that could be an advantage.
If language is not what differentiates you, then expertise and specialization in a niche market might. As an example, you can focus your practice at helping dentists and other medical professionals understand the tax and planning issues they will face when retiring or selling their practice. Another example would be to help families with a child that has a disability. You can become an expert in RDSPs, Henson Trusts, QDT Trusts, Lifetime Benefits Trusts…. The list goes on and on.
Whatever you do, differentiate yourself and make sure your clients understand your uniqueness.
Related stories:
From industry outsider to industry leader
Why investors might be focusing on the wrong signals
