Founders of a freshly minted financial planning firm in Canada are confident there is strong demand for its brand of holistic wealth management advice, seeing a significant gap in the market for this type of service.

Founders of a freshly minted financial planning firm in Canada are confident there is strong demand for its brand of holistic wealth management advice, seeing a significant gap in the market for this type of service.

Sustainable Family Wealth Partners was launched in January this year by Lisa Collins, a legal professional working in Canada, and Aileen Collings, an accounting professional with a designation in financial planning in Canada (both are also members of the Society of Trust and Estate Practitioners). Both women have been working together for about three years in the wealth planning business and prior to that headed wealth planning teams at larger Canadian based wealth management firms. Their own experiences, and views of the shortcomings of the current market environment, helped drive them to start the new firm. 

“Over the years we have observed wealth being wasted through a lack of proactive planning. This waste can result from overpaying taxes, inadequate succession plans that threaten the future viability of the businesses, fighting over money and the business. Improperly managed, these issues can lead to costly and heartbreaking disputes,” Collings told this publication in an email in response to questions about the firm.

The recent financial crisis, heavy stock market losses and high-profile scandals have rocked the wealth management sector around the world, encouraging some in the industry to develop new business models and thereby hopefully restore battered clients’ trust. In particular, a common complaint has been that wealth managers have been content, during easier market conditions, to “push” products at clients rather than act as genuine trusted advisors.

The new business of Collins and Collings taps into that perceived need for more advice-led wealth management, as well as reflect how wealth management should comprise much more than just investment management. Their legal, accounting and financial skills are designed to highlight this “holistic” appeal.

No wasted wealth

“We want to help business owners avoid wasting the wealth they have worked so hard to build. When given the opportunity and outlet they are able to envision the future and put plans in place for what they want their wealth to do, for their family and other causes of interest,” Collings said.

“The firm was set up to fulfill a need for private business owners. We developed our service and our approach based on our observations from many years working with business owners in private law practice, public accounting and financial services. The traditional legal and accounting firms are typically not designed to provide a proactive and holistic approach to helping these clients manage all of the family’s wealth, or provide integration with the clients’ financial management,” she continued.

In the women’s opinion, the current market – not just in Canada – suffers from lack of adequate supply of what Collings calls “holistic” advice.

The approach

Collings said the firm provides “comprehensive wealth planning for business owners and other high net worth families who have more complex affairs”. She gave a number of case studies in which she and Collins have tackled issues such as overpayment of taxes, succession dilemmas and issues involved with special needs children. 

For example, clients are offered a “Strategic Wealth Planning Program” that unifies elements of financial planning, tax and estate planning, business succession, financial product integration and family governance. The program seeks to fully understand clients’ financial and business affairs and a family’s circumstances, goals and objectives. The second stage of the process is a “Wealth Planning Report” that recommends on issues encompassing personal planning (financial and tax planning), business planning (cash flow, distribution, succession, tax, structural and governance planning), and the care and distribution of their wealth (lifetime gifting, philanthropy, incapacity and estate planning). Another important element of the program is the oversight role that the firm plays in implementing a plan.

Lack of service

“In our view this market [for holistic wealth planning] has not been served – that is why we developed our Strategic Wealth Planning Program. The extent of the advice needed by business owners requires many specialized areas of expertise and most financial advisors do not feel confident or want to wade into that,” she said.

“However, the financial advisors who work successfully with business owner clients know when to bring in specialized resources to work with them. Thus, we receive many referrals from financial advisors who realize that a more holistic approach is required, and they want to work with us to provide comprehensive solutions to their clients,” Collings continued.

With any business model, a question that arises is whether such a business type can succeed in different countries. Do the creators of this business think there are business forms outside of North America that can succeed, such as the Swiss private banking mode?

“In our view, in the Canadian market place clients tend to keep their banking and these types of services separate.  Most of the business owners that we work with would not look to their bank for the kind of service that we provide.  As well, we have observed that higher net worth clients tend to deal with more than one financial advisor. (Split between advisors and bankers.)  Higher net worth business owners really value their privacy and tend to separate these functions,” Collings said.

“Having said that, there are Canadian banks currently building up “wealth planning” divisions, but many appear to be more of a mass approach,” she said.

The firm mainly reaches potential clients via intermediaries; it gets referrals from financial advisors who are concerned that their clients’ financial affairs are not in order and need to be helped. It also issues a quarterly newsletter sent to advisors, clients and other contacts in Canada. And both women speak at industry events and business gatherings as a way to spread their message.