As sizeable shifts in client demographics transform the wealth management industry, with newly wealthy Canadians appearing en masse in recent years, new opportunities abound for wealth managers. Even amid clients who are already with wealth managers, studies have revealed that three out of ten Canadians would switch wealth managers given the right opportunity. What this all means for up-and-coming wealth management firms is that there are industry changes on which to capitalize. What it also means is that you need to do it right.
You need no one to remind you that there are risks in creating a wealth management firm, but for those shrewd firms who achieve success, the business can be lucrative. With the advent of CRM2 (Client Relationship Model [version 2]), a new emphasis is being placed on transparency, and indeed one of the largest considerations a new firm should make is how to earn and keep client trust. That’s an overarching tip that every new wealth management firm should keep in mind – and here are four more tips for success!
Start On The Right Foot
Most wealth managers looking to open their own firm do so from an existing firm or bank, which can spell trouble if done improperly. There are almost always legal consequences built into a contract that forbid employees from promoting a different service, and non-compete clauses that might stay in effect for some time after the employee quits. Do your due diligence and act in accordance to your contract. Failing to do so could doom your entrepreneurial idea from the start.
Pursue Referrals From Clients & Wealth Management Services
Referrals are a large part of a wealth management firm’s growth, and – on the flip side of the coin – a large part of a client’s portfolio growth, as clients tend to share well-performing wealth managers with their friends and acquaintances. But don’t rely on client referral alone. Working with a service like Wealth Management Canada, operating out of downtown Toronto, that researches and identifies wealth management firms could also be a great way to get your firm’s brand out there. They perform extensive due-diligence to identify the best wealth managers in Canada and, if your firm meets the quality standards, recommend you to investors when appropriate.
Stand Out From The Crowd
If you specialize, make your specialization known and easy to understand. Demonstrate what makes you different – whether it’s the attention you pay clients (something that large firms have difficulty matching), the way you leverage current technology, or your provable, repeatable track record.
Focus On Service
Ask yourself if you engage with your clients, whether you ask them questions, listen to their concerns and, ultimately, work on building long-term relationships. It doesn’t pay to juggle a large number of clients, offering each a fraction of your attention. A successful wealth management firm has tobe committed to superior service, both to drive performance and as a means of marketing.
While it’s certainly fair that you would want to “strike while the iron is hot” here in Canada, create your wealth management firm carefully, taking into account these four tips.