1. The Evolution of Wealth Management
Garth Gibbes & Carl Brillinger
April 29, 2014

2. What is your current market for your Products & Services?
Who is your client?
Why do they do business with you?
What needs they have that you serve?
What do you provide them that is unique?
How do you differentiate yourself?

3. How did Wealth Management Evolve?

4. What is Wealth Management?
Why does someone buy or own mutual funds and stocks?
What is the purpose of an investment?
Why does a client care about superior investment returns?
What role does ‘money’ play in a client’s life?
How important is “trust”?

5. Wealth Management: a working definition
An integrated approach to a client’s financial planning needs
Focuses on client before product sales
Combines advisory services with product placement
Geared to a client’s life stage needs

6. How did Wealth Management evolve
Pre-1980, Financial Planning focused on affluent clients
Effect of the baby boom
Crumbling of “four pillars”
Growth of product suppliers and products
Explosion in number of investment advisors
Changing client needs as they move through their life cycle

7. How is Wealth Management Delivered?

8. The view

9. The key industry players in Wealth Management
Clients
Manufacturers
Regulators
Distributors (advisors)
Educators

10. The Evolution of Wealth Management Annuities, retirement plans
CSI Wealth Management II, November 2007
The Evolution of Wealth Management
1. The industry prior to 1980
Investment
Advisors
Insurance
Agents
Chartered
Banks
Trust and
Estate
Family protection
Young families
Business protection
Annuities, retirement plans
Custodial services
Transfer agents
Trustee role
Tax planning
Estate structure
Affluent clients
Stocks and bonds
“hot tips”
Investment selection
Personal banking
Deposit services
Guaranteed products

11. The arrival of Wealth Management
Within the last decade, services increased as stock market bubble burst and corporate scandals surfaced
Clients demanded trusted source of advice
Advisors are becoming better educated
Baby boomers and parents required help securing their retirements and transferring wealth to children
High net worth clients and families now have access to more skilled professionals
Wealth management firms now compete on trust and reputation and recognize the importance of fiduciary duties

12. The industry response to aging clients
More emphasis on lifestyle issues and the role money plays
The emergence of the “key” advisor or “Chief Financial Officer”
The explosion in products and approaches to meet client needs
Mass-marketing of products and services
Increased focus on client education

13. The evolution of the distribution industry
Pre-1980 investment advice was commission based
Insurance and mutual funds based on distribution model
Legal and regulatory restraints on advisor activity
Deregulation occurred in U.S. in 1975 and Canada in 1992
Crumbling of the “four pillars” came as a result of deregulation
Distribution through financial advice became the norm
Canadian chartered banks play a major role in distribution and industry change
Wealth management approach became effective way for distributors to create cross-selling opportunities

14. Types of distribution companies
“Full-Service” investment advisors
“Mutual fund” financial planners
Insurance financial planners
“Fee-based” planners
Referral financial planners

15. Wealth Management and Advisors
Advisors are adjusting to their aging clientele
Advisors moved from specialists to generalists
Advisors are marketing themselves as comprehensive planners
Advisors hold multiple licenses (insurance, investment management, commodities, futures, etc.,)
Advisors are using the Wealth Management Approach as a way to differentiate themselves and provide more relevant information and advice.

16. Delivery of Wealth Management Advice
Commission: advisors take a percentage of value transaction
Fee-base: advisors charge a set fee for their advice based on asset size
Fee-for-service: advisors charge by the hour or the plan
Fees plus commissions: advisors receive commissions from manufacturers (trail commissions or service fees); may also charge fees for plans

17. Who is providing Wealth Management Advice
Full-service investment advisors
Licensed financial planners
Mutual fund sales people
Insurance agents
CA’s, CMA’s, CGA’s and accountants
Do-it-yourself (internet, media, on-line investing etc.,
Commercial Banking people

18. What types of advisors practice wealth management
Established advisors: have a mature book of business and long-term relationships with clients
New advisors: desire to market a different approach to client relationships
Women advisors: taking a more holistic approach to wealth management
New immigrant advisors: Understanding the specific cultural needs

19. Clients who receive wealth management
High net worth clients: clients who seek a “key trusted advisor” who can advise on all areas of their financial life
Business owners: clients who are transitioning out of their business and into retirement
Investment buyers: clients who incorporate their investments into a bigger financial plan
Senior executives: clients who are looking at an integrated approach to their financial plan and an advisor who can save them time
Women clients: clients who take a more “family” view of financial planning and investing

20. The role of the wealth advisor
To understand the client’s views of money and to match financial solutions to client needs
To educate client on issues they may not be aware of
To “coach” client to set and attain financial goals
To act as a “personal Chief Financial Officer”

21. The Personal Chief Financial Officer
CSI Wealth Management II, November 2007
The Personal Chief Financial Officer
Wealth Advisor
Investment
Management
Insurance
Needs
Tax
Issues
Business/
Credit
Issues
Estate
Planning

22. (from An Advisor’s Point Of View )
Wealth Planning
(from An Advisor’s Point Of View )
CSI Wealth Management II, November 2007
Investment
Management
Tax Planning
Estate Planning
Income/Cash
Management
Charitable
Giving

23. Four client financial life stages
Accumulation phase: Family and career building
Preservation phase: Planning for retirement and life after work
Converting wealth to income: Utilizing assets to finance lifestyle
Transfer of wealth: Passing on assets before and after death

24. How to become the best wealth advisor
Focus on your client’s overall financial needs
Become a trusted advisor by not being a “product pusher”
Improve your listening skills
Want to be in your business for the long-term
Understand the changing industry
Invest in your wealth management education
GOODLUCK!

25. Q & A