Practice Management

Differentiate yourself: It really works, and here’s how

Michael Zagari, Mandeville Private Client Inc., shares the secrets to his firm’s success, starting with a disciplined process to find the right client, time and again.
July 2020

Michael Zagari

Investment Advisor, Mandeville Private Client Inc.

LEARN MORE ABOUT THE AUTHOR

Subscribe to our insights

As one of Wealth Professional’s top 50 Advisors in 2019 at age 35, and a nominee for two 2020 industry awards – including the Franklin Templeton Advisory Team of the Year – Michael Zagari, Mandeville Private Client Inc., shares the secrets to his firm’s success, starting with a disciplined process to find the right client, time and again.

From the ground up: Where it all started

My career as an Advisor began when I was 19 years old. I cut my teeth at a national financial services firm, where I worked for nearly 10 years, and met my business partner and close friend, Edward Simpson. It all changed for us in 2011, when we decided to start an independent practice to more efficiently monetize the value we were creating. We took coaching seminars with a business development expert who explained the “fit” process, which fundamentally ensures clients match with the right professionals for their respective needs and goals, while helping Advisors find the ideal target client at the same time.

And that’s when it hit us: we needed to change our mindset, build the necessary infrastructure and distinguish ourselves from our peers. We decided to embark on a series of transformations that put Zagari Simpson & Associates on the map as an advisory experience that exceeds expectations. From developing our my Planning® process to shifting to a fee-based model to creating a niche and promoting maximum transparency and trust, the business has grown tenfold to $179 million in assets under management (AUM) – and a team of 13 Advisors – in just eight years.1

The business has grown tenfold to $179 million AUM – and ateam of 13 Advisors – in just eight years.

Closing the gap with personalized planning

At the heart of our proprietary process is a conceptual focus on comprehensive financial planning, including detailed reporting, lifetime cashflow projections, milestones, what-if scenarios, estate & legacy preparation, insurance solutions, and tax advice. We believe that giving our clients 100% clarity is vital, because most of the time, there is a fundamental disconnect between how their current affairs are organized and the goals they’re trying to accomplish. Not a single prospect we have met with has had a written financial plan that could articulate their objectives. How do you build a portfolio with an expected rate of return without knowing the return you need? Many times, clients will come into our office and say they want to retire at 60, but their portfolio is too conservative to achieve this. Or they lack purpose, and aren’t motivated by the process.

By truly listening to their needs – and performing x-ray portfolio analysis – we work to educate our pre-retiree market on the financial decisions they’ve made previously, and perhaps show them that if they target a higher rate of return on their investments, they may not have to change their lifestyle or the savings habits they have in place. The key here is education because while many of our clients may not understand the investment side, they do understand financial planning; it’s all about framing in the right context. Instead of arbitrarily judging statements on a quarterly basis and not being genuinely engaged, clients can actually appreciate their goals, and track their pre-determined personal milestones according to the finite plan we have created. These goalposts also help prevent any emotionally-driven investing because they can see the bigger picture in hand. Before any of this preparation can start though, our my Planning® process involves two discovery consultations and a “Fit-Call”, which are designed to assess whether clients are the best fit for us, and vice versa – an essential foundation to building deep, long-term relationships that engender trust.

Instead of arbitrarily judging statements on a quarterly basis, andnot being genuinely engaged, clients can actually appreciate their goals, and track their pre-determined personal milestones.

Choosing the best fit (for Advisors too)

The “Fit” assessment is influenced by one of our most important pillars as an Advisory practice: accountability versus suitability. This mindset has been a game changer for our firm. To us, it’s not simply about appeasing clients and building traditional 60/40 portfolios, but rather ensuring that they’re making smart – and appropriate – investment decisions for which my team and I can be held accountable. And that’s what we base our advice on. So, if a prospective client has no interest in learning about capital markets, or investment planning, then that’s an issue for us, especially if they have no knowledge base because we may not be able to guide them in a direction that we can stand behind. It can be the difference between a lower targeted rate of return versus realizing an additional spread over 20 years at a slightly higher risk to provide the additional support required – whether it’s for parents, long-term care, or to assure independence.

It’s not all about adding AUM. It’s about making that true connection with the right clients, alleviating their concerns, and having them embrace the unique ecosystem we’ve created at Zagari Simpson & Associates for the long term. From the very start of the relationship, there needs to be a chemistry that goes both ways, and if there isn’t, I have no hesitation directing them elsewhere. That’s why I have clients with a few million in their portfolios, and I have those with $200,000; what they have in common is the right attitude for wealth creation.

If a prospective client has no interest in learning about capitalmarkets, or investment planning, then that’s an issue for us, especially if they have no knowledge base.

Fit comes first

Fit comes first chart

The “fit” process, which fundamentally ensures clients match with the right professionals for their respective needs and goals, while helping Advisors find the ideal target client at the same time.

Beyond investments: a holistic pre-retirement offering

Because of our “best-fit” focus, almost all of the referrals we receive already speak our language when they walk in the door, and are within our pre-retiree niche market. And they hear exactly what they want since we specialize in holistic retirement planning that caters to their specific personal needs.

 

Our offering extends beyond investments, with insurance solutions, access to accounting and other experts, and timely communication. As a consistent client touchpoint, my weekly newsletters allow me to connect to – and educate – pre-retirees on a whole different level, showing them that I’m not just a robot managing their money, while at the same time helping to mitigate market fears and shedding light on new opportunities. They engage with me personally; for example, when the coronavirus crisis started, I wrote about my experience working from home, including the small “lunchbox-sized” Ikea desk my wife purchased, and many people reached out about how they could relate to the anecdote. What always sticks with me is that new clients often comment about how they never even knew this type of genuine, transparent Advisor communication existed, and for me, that’s a win for our business, and the industry.

Another example of our value-add is ongoing education, such as our exclusive partnership with Dr. Gillian Leithman, founder of Rewire to Retire. Through her content and seminars, she focuses on helping our clients navigate retirement from all angles, including both the social and emotional aspects. Without the proper guidance, it’s easy to experience stress or feel unprepared for this major life transition, even with a fully funded retirement plan. Recently, we hosted a successful webinar where she discussed the effects of social distancing on loneliness, and the potential for a new pandemic – a relevant issue that struck a chord with our client base. 

My weekly newsletters allow me to connect to – and educate pre-retirees on a whole different level, showing them that I’m not just a robot managing their money.

Social media savvy – put a “fingerprint” on it

Client engagement is a true driver of our firm success, including on social media, and it’s how I continue to build my personal brand. For me, LinkedIn is how I generate awareness of what I do, and how I think. All of my posts have my fingerprint on it: I don’t churn out pre-loaded, mediocre content that won’t differentiate me from other Advisors. Instead, I initiate thought-provoking discussion. For instance, I recently posted about Lululemon’s 130% surge in stock price, despite record U.S. unemployment levels, and there was a ton of interaction off that. It’s important for me to be authentic. I think of LinkedIn as a public stage to promote my beliefs, values and how I handle tough situations. To make this process efficient, I use AdvisorStream to easily share timely, compliant content that complements my views, without having to worry about paywalls or ads.

A solutions provider always

As a full-service team of family Advisors, we’re dedicated to providing solutions – not products. Levering Mandeville Private Client’s investment expertise and intellectual framework, we make recommendations that align with the personalized plans and projections we create, and the shortfalls we uncover. This may mean opting for concentrated portfolios because we believe that for the right type of client, owning a smaller group of high-quality businesses in long-term growth industries is a more efficient way to generate income. While some level of diversification should be a consideration in portfolio construction, it should not be the driving concern. The primary focus should always be on meeting individual investor objectives. For example, if your client is 20 years away from retirement, perhaps an increase of 1% to their targeted rate of return would give them the necessary stride toward their personal goals. Conversely, if they’re five to 10 years away from retirement, they may need an additional 2%-3% return on investments, and this is where a concentrated portfolio (versus a diversified one) could be the best answer, especially if they don’t want to save more, or spend less.

For the right type of client, owning a smaller group of high-quality businesses in long-term growth industries is a more efficient way to generate income.

To execute on a high-conviction strategy successfully, we operate on the “own the business, not the stock” philosophy. We invest in companies with robust business models that can consistently generate above average earnings growth over the long term, while also generating attractive returns on invested capital; quality exposures in sectors that have genuine, clear-cut tailwinds over the next three plus years. As Advisors, our role is to manage people’s money prudently, so we know the businesses we recommend inside and out. What does the business stand for? Who’s the management team? Are we investing in a company that is looking for a golden parachute? At the end of the day, clients trust us to manage their finances, so every choice we make is one we can support without question. That key tenet is what I pride myself on as we continue to scale up our practice, and it’s what our clients will remember 20 years from today.

Michael Zagari on BMO Global Asset Management

To manage concentrated portfolios in this environment, BMO ETFs are an effective and efficient tool to access the strong performers I need to achieve targeted returns. BMO Covered Call Canadian Banks ETF (ZWB) offers pure exposure to Canadian banks – well capitalized, quality assets known to provide growth, income stability and resilient dividends – without any unwanted inclusions from other sectors, while also generating additional yield from the call option overlay.

To gain more valuable insights, and tools for a robust portfolio amid the current market volatility, contact your BMO Global Asset Management Regional Sales Representative, and access our Volatility Centre.

Subscribe to our insights

Disclosures

1 Zagari, Simpson & Associates, Mandeville Private Client Inc., June 30, 2020.

 

Mandeville Private Client Inc. Disclosures

Mandeville Private Client Inc. is a Member of the Investment Industry Regulatory Organization of Canada and a Member of the Canadian Investor Protection Fund. Mandeville Private Client Inc. is a registered trademark of Portland Holdings Inc. and used under license by Mandeville Private Client Inc.

 

BMO Global Asset Management Disclosures

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Limited and BMO’s specialized investment management firms.

®/™Registered trade-marks/trade-mark of Bank of Montreal, used under license.

Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent simplified prospectus.

This article is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Investments should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance. The testimonial(s) in this article may not be representative of the experience of other people/advisors. The testimonials are no guarantee of future performance or success. These are solicited testimonials.

Commissions, management fees and expenses (if applicable) all may be associated with investments in mutual funds and exchange traded funds. Please read the fund facts, ETF Facts or prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Distributions are not guaranteed and are subject to change and/or elimination. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated.

For a summary of the risks of an investment in BMO Mutual Funds or BMO ETFs, please see the specific risks set out in the prospectus. BMO ETFs and ETF series trade like stocks, fluctuate in market value and may trade at a discount to their net asset value, which may increase the risk of loss. Distributions are not guaranteed and are subject to change and/or elimination.

BMO Mutual Funds are managed by BMO Investments Inc., which is an investment fund manager and a separate legal entity from Bank of Montreal.

®BMO ETFs are managed and administered by BMO Asset Management Inc., an investment fund manager and portfolio manager and separate legal entity from Bank of Montreal. 

Related articles

No posts matching your criteria
August 2020

Lessons from the pandemic: professionalizing virtual client meetings

As the world slowly begins to re-open again, the financial services industry can’t afford to assume a return to business as usual. Sanjay Singla, Vice President, Intermediary Distribution, Central Ontario, BMO Global Asset Management, believes virtual face-time with clients will now be a permanent part of the Advisor offering going forward, and shares his insightful tips on how to differentiate yourself with a polished and professional online approach.

August 2020

From one book, to three: making every transition count

Matthieu Bouchard, Groupe MCB Private Wealth Management, has written a strategic growth story for himself, buying one book after another over the short span of three years. In this issue of Insights, he shares the details about every transition process, offering practical tips and tricks that have facilitated a near perfect retention rate.

July 2020

Boosting productivity: Referrals, new assets and client anxieties

Rich Poulin shares the best ideas for managing client anxieties, asset retention and business development.

June 2020

How to alleviate the COVID-19 burden on your senior clients

Rhonda Latreille offers tips and tools for how Advisors can demonstrate leadership, offer support, and ultimately, grow their practice – with compassion.

June 2020

The steadfast advisor: Managing retirees in their third bear market

Over a career spanning two decades, industry veteran Kjell Johnston, Senior Financial Advisor, Assante Wealth Management, has guided investors through multiple crises and downmarket cycles – now he shares his hard-won lessons about safeguarding retirees and near-retirees from the perils of an extreme market event.

June 2020

High yield and reduced portfolio risk? It’s possible even now

An inside look at tactical covered call exposures in the current COVID-19 climate.

May 2020

3 practical tips for managing clients during a crisis

Using technology to your full advantage, you can ensure work-from-home feels like business-as-usual.

April 2020

A veteran advisor’s five-step growth hack

From articles to seminars and workshops, this Advisor creates a “drip factor” of credibility.

April 2020

How to manage volatility now – and enhance your practice

Help ease your clients’ fears and stand out among your peers.

April 2020

Coaching clients through uncertainty

In an effort to support your client conversations during these times, we recorded this special episode with Steve Sanduski full of actionable ideas to help both you and your clients thrive during and coming out of this period.