From one book, to three: making every transition count

Matthieu Bouchard

Financial Security Advisor, Mutual Funds Representative, Group MCB Private Wealth Management, PEAK Investment Services Inc.

LEARN MORE ABOUT THE AUTHOR

Matthieu Bouchard, Group MCB Private Wealth Management, PEAK Investment Services Inc., 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.

Successful transitioning

After falling in love with the business almost immediately out of university, I acquired my grandfather’s book in 2017, at age 22. That led to a significant growth trajectory for my firm – Group MCB – propelled by the strategic purchase of successive books over the next 2.5 years. We’re currently in the midst of transitioning, and it’s been a meaningful journey thus far, growing to 300 clients and $60 million AUM – with plans to augment these numbers further once our latest acquisition is 100% complete.

While COVID-19 was unexpected, there hasn’t been a detrimental impact to the process. In fact, it has only accelerated change that we wanted to implement previously – from electronic signatures to the adoption of virtual platforms that save us time and effort that could be spent on other growth – and service-oriented – initiatives. For example, I’m now working on a social media marketing campaign to generate awareness of our brand through Facebook and Instagram ads, slowly but surely bringing in a greater number of younger professionals into my practice. The changes have improved efficiency and productivity, and we see these tools as a complement to our existing offering, even beyond the pandemic. It’s particularly helpful for clients too, with so many families now pressed for time and juggling multiple responsibilities.

Though every transition has been different, they’re all driven by my ambition to build a practice that exceeds expectations, and creates lasting partnerships.

Book one: listen and learn

The first book I bought was my grandfather’s, who ran his practice for more than 35 years, so that has been a unique transition because the business stayed in the family. I started my career at his firm in an entry level position while I obtained my licensing, so I used that time to learn the details about every client and then shadowed him closely before taking the reins. As a result, there’s already an element of trust built since the same values have been passed down, and client feedback so far has been extremely positive. We’ve seen a 97% retention rate, and the relationships have all flourished from when I began working with them almost four years ago.

Having been through it, what I would recommend is that when Advisors meet clients for the first time, don’t talk about yourself and what you can do for them – simply listen intently. Your goal is to understand their wants and needs first, and only then can you build toward helping them achieve their objectives. As an example, if they don’t want a financial analysis, it’s not necessary to push one on them; instead, speak in simple terms, and bring them numbers they can easily comprehend. In general, the number one complaint I hear is that “my previous Advisor is very intelligent, but he uses financial jargon, and I don’t understand what he’s saying.” I always try to speak to my clients as if I’m speaking to someone with zero investment knowledge.

Constant, effective communication is at the core of our offering at Group MCB. At the onset of the global pandemic in March, we took the initiative to send a weekly email update, keeping clients informed of current market events – from PM perspectives to Goldman Sachs’ viewpoints on the economy – which really helped assuage concerns and panicked calls. It also landed us six referrals from people who appreciated that responsive service and transparency, which inevitably was missing from their current Advisor relationship.

Book two: chemistry pays off

With my second purchase, most people would have expected the transition to be more challenging, since the seller was a fellow PEAK Advisor, whose clients I had never met before. My extensive experience working with retirees (from my grandfather’s business) has been instrumental to this successful integration – in large part due to the chemistry between myself, and a similar clientele. I use youth to my advantage; it means they will likely never have to change Advisors again, which has helped them grow increasingly comfortable with the situation.

Even more extraordinary has been the 20% growth rate at which I have developed this book over the last year, which is far beyond my most optimistic projection. How did it happen? Well, I’ve personally met with all the clients, and delved deep into their portfolios, developing detailed financial plans so we could objectively assess their progress from a more holistic perspective. I realized there were assets held at banks or retirement pension funds that could have been invested more strategically. For instance, we’ve had a few clients recently whose assets we allocated toward environmental funds, an area that resonates with us and is becoming more prevalent in our conversations.

Book three: building from a solid foundation

My grandfather had two longstanding associates, one of which is still active, but at a place where he wants to solidify his succession. Last year, we signed a legal agreement to buy 100% of his book within a five-year period. Currently, I own a 10% stake, with plans to acquire another significant portion in 2021. This last transition process has been interesting because most of the clients knew my grandfather, and while they don’t know me personally, they know my story. It’s similar to a warm lead in the sense that there’s inherent trust; they understand how I work and the values on which my business was built, so I’m optimistic about retention. I’ve already met 10% of his clients personally, and if all goes according to plan, I’ll manage approximately 200 more people, which brings my firm to 500 households under management.

I’m confident in our approach, which prioritizes personalized financial analysis. We don’t use “cookie cutter”, model portfolios, but instead cater to our clients’ unique needs, time horizon and risk tolerance level – whether they’re interested in impact investing or robotics or artificial intelligence. What’s most important to us is that we understand 100% of our clients’ objectives, and what they’ve accomplished with their previous Advisor. If everything is working, we’re not looking to rock the boat, and change things unnecessarily. We work to earn their trust first and foremost, and if down the line, there are modifications to be made to optimize the portfolio, then clients will rest easier at night knowing we’re truly looking out for their best interest.

Expanding…into a new niche, and more

To expand further, a year ago I brought on an associate and long-time friend, Maxime Bourque, to learn the business from the ground up, like I did. He finished his business degree last May, and the plan is to mentor him for a few more years. When the timing is appropriate, we already have the roadmap in place to acquire another book for him to manage on his own.

I also plan to continue to develop our current practice, with both existing and prospective clients. Specifically, the median client age of the books we bought was 69, so we’re looking to attract younger professionals and entrepreneurs – a niche I can relate to as I build my own business and undertake a similar process. I connect with these clients on a deeper level through conversations about their future vision, comparing ideas, objectives and obstacles that we’ve shared on our respective paths.

We also make an effort to nurture relationships with the next generation – making it known to them that we’re available anytime if they have questions, and always inquiring about the family at every client meeting. That detailed knowledge – from birthdays and pet names to family dynamics and planned legacies – is irreplaceable, and it’s how we ensure our relationships extend across generations.

Practical advice as door opens to more buyers

For potential buyers right now, several factors are contributing toward a changing environment – from the older average age of an Advisor to market uncertainty and greater compliance and technology demands that require significant time and effort. Especially with COVID-19 hanging over us, I believe more Advisors will be interested in selling their book. There’s been a recession and we have barely seen any evidence of it in terms of portfolio performance, and the virtual burden may eventually take its toll on those unable to adapt.

If you’re considering buying a practice, come prepared with a written transition plan before meeting with a prospective seller, and be open – listen to what they want their clients to feel, and their goals for succession and business growth. What are the key lessons they’ve learned over the years? If you appreciate the advice they’re giving, and actually implement their plans, it will positively impact client retention in the long run.

Ultimately, the key to a smooth transition is chemistry between the buyer and seller. A selling Advisor will typically stay on board for a 2-3-year-period after the acquisition, so you don’t want to work with someone who clashes with you on different issues, especially since clients can sense this type of negative energy. A strong bond based on mutual respect will facilitate an easier changeover process.

At the end of the day, we’re in a relationship industry – it’s not just about performance. You can manage the best portfolios generating robust returns, but if clients don’t trust you or feel at ease with your decisions, they’ll quickly make a switch. And that’s what motivates me the most – knowing that people feel secure with their investments, and that I can provide that peace of mind to allow them to enjoy their success – and accumulate wealth in the process.

Matthieu Bouchard on BMO Global Asset Management

In the current environment, we like BMO ETF Portfolios because it’s the only vehicle on the market that offers a conservative approach (25% stocks; 75% bonds) and optimal risk management in a corporate class series, meaning we can apply it for non-registered accounts too. Increasingly, we’re using BMO Sustainable Opportunities Global Equity Fund because we like the manager’s excellent track record in responsible investing, which is becoming more present in our portfolios, and client conversations. We also value the transparent, analytical, long-term approach of BMO Concentrated Global Equity Fund, which resonates with sophisticated clients that like to track their holdings

To gain more valuable practice management insights, and tools for a balanced portfolio, contact your BMO Global Asset Management Regional Sales Representative.

 

For further resources on buying, selling, or transitioning a book of business, refer to the podcast below:

BMO Global Asset Management: The Advisor’s Guide to Buying or Selling A Practice >

Disclosures

Group MCB Private Wealth Management Disclosure:

Managed investment products such as Mutual Funds, ETFs, GICs are offered through our Mutual Fund Dealer, PEAK Investment Services Inc. Financial Advisory, Risk Management, Investment Management, Due Diligence and other related services are separate from PEAK Investment Services Inc and are solely provided by Group MCB Private Wealth Management.

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
September 2020

Embracing a virtual COI strategy

When it comes to building referral networks, a digital-friendly approach is now table stakes for Advisors seeking to grow their business. For a deeper look, Ben Jones, host of BMO’s Better Conversations, Better Outcomes podcast, offers timely advice and actionable tips to bring your Centres of Influence (COI) strategy to life.

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.

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.

July 2020

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.

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.