Transcript | The value of wealth advice

Sarah Widmeyer:Welcome to Conversations on Wealth, hosted by Richardson Wealth, a podcast dedicated to helping Canadians with your total financial picture.

Our approach is unique. We examine wealth through a multi-dimensional lens in order to offer you integrated strategies to grow and preserve the legacy you have built. 

I’m Sarah Widmeyer, Director of Wealth Strategies at Richardson Wealth. Joining me today is Mike Ankers, Director of National Sales at Richardson Wealth. I'm so happy to have you here with me today.

Mike AnkersThanks, Sarah. I'm really happy to be here too.

Sarah Widmeyer: We're gonna have fun.

Mike AnkersI bet.

Sarah Widmeyer: So we're going to talk about wealth management which I think is a topic both near and dear to both of our hearts. I know I've heard you say that ultimately, value added wealth advice is about making sure that our clients have have an attainable, purposeful plan so that they can reach their goals and live the life that they want to live. And I know you have a very personal story about that. And I was wondering if we might start with you sharing that?

Mike Ankers: Yeah, I'd be happy to share it. It's really my personal why as to why I chose this career and why I wanted to be in this industry in general. When I was 18 years old, my dad suddenly passed away, and my parents didn't have any savings. And they certainly didn't have any, an investment advisor of any sort. And my mother really took that personally, and she wore the weight of the world on her shoulders. She's raising two boys, and now all of a sudden, she had to figure this out because she received his life insurance check from his employer, and it was two times his income. So it's more money than she's ever seen, and I remember the fear that she wore over that because of a number of things. One is, she didn't know what questions to ask. She didn't know who she could help. She didn't want to look silly, and just didn't want to get taken advantage of. And I'll never forget it, my uncle drove into our driveway one day and said, Joanne, get in the car. And they drove to funny enough Richardson Greenshields office in Kingston, Ontario. And she went in and got an Investment Advisor who said, I'm going to look after this for you, and she came home light as a feather. And it really struck me then, because I was always interested in finances as a kid and I like that, I like the idea of financial management, but it wasn't until I saw it paired with people that it really struck a chord with me to say they think it's so much more than just putting money in an account. It really speaks to how people feel about their path going forward and the confidence that they can move forward with.

Sarah Widmeyer: It's about finding a trusted relationship.

Mike Ankers: It really is.

Sarah Widmeyer: From our end, I think it's about helping people. At its core, it's about helping people and whatever shape that looks like whether it's planning, whether it's investing, whether it's sometimes just being there and talking about something that is completely unrelated to the money in the account. It's it's about helping people.

Mike Ankers: It is. And it's a bit of an ongoing relationship, because where people need help today is going to be very different from where they need tomorrow. So in order to have that honest and open relationship, you need to be very forthcoming with each other and work toward a future goal.

Sarah Widmeyer: So let's help some people. How can clients ensure that they are getting the advice that is truly in their best interest? What are some of the things they should be looking for in the dynamic with their Advisor? Or if they're shopping the market for a new Advisor, how can they ensure that they're getting the best advice possible?

Mike Ankers: That's a really good question - something that I get asked a lot inside work and outside of work as well. There's a lot of people out there that say they can help but it's really about asking yourself the question, what do you want to, what do you want? You know, do you want somebody to just invest your money? Do you want a relationship with somebody, because not one size fits all? And then you've got to look at your existing relationship and say is that relationship providing writing that to me. I always tell people that they need to be open and candid with their Advisor. Don't hold back. If something's bothering you, you need to speak up. If you have a question about something you need to ask. In this business, we'd all love to be mind reader's and be able to predict the future. But we can't. We're dealing with, we're people too. A mentor of mine taught me a really important tool that she uses in meetings with people and she calls it an expectations meeting. It's a non confrontational way to get everything out on the table. So if you're not getting what you need from your Advisor, it's okay to walk in and say I was really expecting to get a more detailed plan about how I'm going to get to X. And, it's also okay to say to your Advisor, what are your expectations of me?

Sarah Widmeyer: Yeah, great question.

Mike Ankers: Because maybe the Advisor didn't read into what you were looking for. Maybe they weren't aware. So setting the table on what your expectations of each other are is a very healthy place to go in a relationship. And I would suggest that for anybody that doesn't feel they're being well served in their existing relationships, but certainly at the outset of a new relationship as well. One of the challenges that Canadians have is sorting through the noise of our industry to try to find us somebody. And I'm going to digress here for a second, but it's a very relevant story shaped me. 
Believe it or not, when I was younger and lighter, one of my goals was to run a triathlon one year, do a triathlon one year. So I would always - I can run, I can swim, but I'd never been on a bike before. So what do you do when you need to find out about something, you go on the internet. And I found great websites for all these different bike shops, and I settled on the one, and it said, we provide personalized, customized, bespoke - sound familiar - and all of these things that they're going to do and the most important thing about a bike is the fit that you get, and we find what's right for you. And I thought, that's what I want. I want that personalized service because I don't know what I'm doing, I needed somebody to take me by the hand and lead me through this. So I went in and I spent a massive amount of money on a bike. And the guy said, okay, come back in a week, and it was January and I went into my shorts and T shirt because I was getting ready for this customized bespoke fitting of my bike. And it was sitting at the cash register with an invoice on it. And it was such a letdown because I was very intimidated by it. And I ended up going to another bike shop, I explained what happened, and they said, well, let's get this fixed for us. And they set up my bike for me, they did it free of charge, and they invited me over to a group ride with beginners.
I was an Investment Advisor at the time. And it really stood out to me because I thought that's exactly what people are looking for when they go to search for a new investment Advisor. We go to the websites, and they all say we provide personalized, customized investment solutions to wealthy Canadians, individuals and blah blah blah. It says all the same thing. So my advice to everybody is, as you you're having these conversations, make sure they actually deliver it. And it can come in many forms. It can be, walk me through your process of how you deliver the things that your website says, for example. When can I expect to receive a financial plan? Walk me through how you do that. And great Advisors will also have a service agreement where they make a commitment to you. And I encourage a lot of people to do that. Yes, we have a trusting relationship with each other. But let's get it on paper in terms of what you want to see from me, and it should be a two way agreement. I know Advisors need to expect clients to be open and honest with them, too.

Sarah Widmeyer: Yeah. What a great summary. Be very clear on what you, if you're the client, what your expectations are. Don't just hand yourself over to someone to do what they feel like with your money. It's your money, and you need to have both hands on the steering wheel in terms of where do I want to go. Be clear about what are your goals, what does make you happy, what's the kind of life that you want to live? And those conversations even though you don't think that they're important, they're so important for the Investment Advisor to get to know you and understand what's important to you and how you want to be dealt with.

Mike Ankers: That's right. And a good Investment Advisor will help you draw that out as well. So coming into a generational plan, you know, you want your kids to be better off than you are, for example, and that's a goal that a lot of people have. But you don't know exactly what that means. So a great Advisor if you have that open and trusting conversation can talk you through that. Okay, well, let's let's break this down. Okay, so you've got two children, all right. Are they equal? Do they think the same? I have two young girls at home and I know one will save a penny and the other one will spend two. And so whenever the day comes that I'm planning for them, it's they're going to be very different approaches and Advisors will help you have that and what is the best approach for for your family as you see fit.

Sarah Widmeyer: I want to turn the page for a moment. At our firm we talk about unbiased advice. And I think, for clients, people would say, of course it's unbiased, it's in my best interest, not your best interest. Of course, it's unbiased. But we really mean something a little different about that when we say unbiased, and I was wondering if you could expand a little bit on that, and why really searching out for unbiased advice is so important to clients. Again, I think most clients don't even think about that. They think, of course, you're an Advisor, you're going to advise me. But what's the difference between advice and unbiased advice?

Mike Ankers: That's a great question. And fortunately, in Canada, regulators are really starting to push all firms in the direction of better disclosure of potential conflicts or where it might be unbiased. I think for us is we believe in the value of advice to Canadians. And ultimately, we're a business and that's what we want to be paid for, first and foremost. If you look at the reason why certain companies exist, They exist to sell products. And we don't exist to sell products. Again, I go back to that we want to get paid for advice. 
So there are some places, perhaps it be a mutual fund company who would hire representatives to sell their funds. And the clients are getting, in many cases, great plans and great Advisors, but they're very limited to what they can actually receive based on their Advisor's platform. So it might just be mutual funds. It might just be mutual funds from one company. Where at Richardson Wealth our belief is that if we're going to truly do what's best for the clients without bias, we should have a choice to use any product we wish. And I say that I say that carefully.

Sarah Widmeyer: I am going to interrupt you for one second. Sorry, on platform, it's an industry word. What do you mean by platform?

Mike Ankers: Great question. It means the tools and resources available to you to service clients. So I look at platform as what products and services we have available. So we at Richardson Wealth have a Tax and Estate Planning group - that would be part of the platform that we can then offer to clients. We have great Portfolio Managers who will put together portfolios for clients. We have great online access, we have all these different things in the suite of those things to provide clients with advice is what I view a platform is.

Sarah Widmeyer: So it's like a fruit bowl on the kitchen island that has apples, oranges, bananas, avocados.

Mike Ankers: Correct.

Sarah Widmeyer: The bigger and more varied that basket is, the better choices and selections we'll make. If it's just a basket of bananas, then bananas is what's going to end up in my portfolio.

Mike Ankers: I think that's a great scenario. So picture now a house party. The more in your basket, the more people you can help. 

Sarah Widmeyer: There you go. 

Mike Ankers: That's exactly how it is. Biases can also come from the way someone is paid. If they're paid to do one thing more than they're paid to do another thing, there is a natural inclination to do the thing that maximizes your own personal value. Some people are very good at spotting this and being aware of it. Other people aren't. But I think it's important for clients to understand how their Advisor is paid. We do disclose in our industry more than ever, exactly what compensation you're getting paid for. But if I'm as a manager and setting a compensation system for Advisors that pays people more to do one thing versus another, I'm putting a bias in the Advisors hands. And we're very careful at our firm to avoid that at all costs.

Sarah Widmeyer: You would think regulation would prevent that from happening, period. But I know you're right, that that that does happen at some firms - that some investment product is compensated more richly than others. So there's a natural bias of the Advisor to sell those things that pay them more.

Mike Ankers: Yeah, in any industry, compensation drives behavior, and our industry is no different. So it's very important to have that frank conversation upfront about how somebody is paid. And good Advisors will be very, very candid about it. We don't have to hide behind what we're getting paid, we need to be forthright about it. And you the client can decide if you're getting value for what you're paying.

Sarah Widmeyer: Yeah. And I don't think any client expects Investment Advisors or Wealth Advisors, not to get paid for the advice and the work that they do. So, you know, it's a question that I think as an Advisor, we should make sure that we're completely upfront about because I think it's an expectation that of course, someone's getting - a lawyer gets paid, a doctor gets paid, an accountant gets paid, of course, we get paid for the advice and the work that we do. So it's a question that as Advisor, we should really embrace and a client should not be afraid to ask, because, in fact, I think it needs to get out on the table. It needs to be, and I think as you rightly point out, problems exists when it is a mystery. It is the elephant in the room.

Mike Ankers: Confidence comes from understanding things clearly. And how can you be confident without that conversation? I often use the example of a used car lot. If two people go in and buy the same car, do they get the same price? Or do you always feel a little bit icky that you could have done a little bit better? And, that's why used car people get their, you know, get the reputation. It's not always forthcoming what they're making and why. Yeah, and we need to stand above that. And like I said earlier, fortunately, regulations are pushing people in the right direction.

Sarah Widmeyer: Yeah. It's funny. I'm gonna inject a little fact about women as clients. Apparently women as clients are really not afraid of asking how much something costs and I think, sometimes Advisors are a little taken aback by that, and they shouldn't be because women aren't afraid of paying for things that are of value to them. Men aren't either, but it is a dynamic of women as clients that they're actually quite forthright about asking. And good on them, they should lead the way on asking how much something costs.

Mike Ankers: I couldn't agree more. I think personal pride gets in the way, that if I have to ask they'll be thinking that I don't have much or that I'm - it's these preconceived notions. You wouldn't go buy a fridge without asking how much it costs.

Sarah Widmeyer: Yeah, exactly, exactly. Okay. So on that note, how does wealth advice factor in making sure that our clients can maintain their wealth into the next generation? 

Mike Ankers: It's a very big question. So let me start with what does the client want? So we'll jump right to - you've established a great relationship with your Advisor, you're open and candid, and you've sort of fleshed out what's happening. There are tools that they can use, whether it be investments or tax planning or financial plan to meet certain goals, but then you got to dig one step deeper. If you're if you're planning for the next generation, what does that mean? So it might be crafting a different plan for each of your children. You know, we've dealt with things where some people might have incapacities that won't allow them to deal with their own money. So mom and dad might be faced with a decision of, yes, Sarah is very capable. But for Mike, we really need to set up a trust to look after them for the long term care. It becomes very, very individual and great Advisors can help you make those decisions to make that happen. 
One of the things, sadly, and you know this from our business, after things happen, it's too late to plan for them. If I've learned one thing in this business, regardless of how difficult the conversation is up front, a difficult conversation, or sorry, a conversation after the fact is far more difficult. And, you know, for example, let me use a story that I came across with a client years and years ago.
Mom and dad wanted the family farm to stay in their family for generations. So they sold it to their son and his wife for a greatly reduced price, and it was very good. They were a young couple, got married, they had kids and they were bringing up on this farm. Well as quickly as they fell in love, they fell out of love. And the farm had to be sold for market value, which was greater extent than what mom and dad sold it for. So not only they lost the farm, they lost a significant amount of the family wealth that was built up in that farm. And it was a really sad story to watch. And I'm not here advocating a prenup agreement or whatever. But a proper plan in place could have kept that farm in the family, which is what they really intended. And bad plans never start with bad intentions either. I've always said if I write a book at the end of my career, it'll be as with all things it started with the best of intentions. That's my opening line. Spoiler alert.

Sarah Widmeyer: It's a good one. When I first started in the business, there was someone that I learned by and that person said to me that one of the most key questions to ask a client in, the first couple of meetings is what's the money for? Because for most people, it's not just about the zeros and the dollar sign. And it really is - money is a tool. And what's the money for? Whether it's to protect the family wealth, or build the family wealth and make sure that it transitions to the next generation. Is it to look after incapacitated or special needs or things that are unique to that family situation? But what's the money for? Is a great question. And I would say to a client, if your Advisor isn't asking that, make sure at least you've got that in your brain and you can talk to it, because it's so important to get out there in terms of building the plans and in terms of building the strategies to work for you in the future.

Mike Ankers: That's true. The what drives the how, and not in reverse. Without defining that, it's really hard to find where you're going.

Sarah Widmeyer: So let's talk about digitization. It's a big word. It's a word that is becoming more and more used in the wealth management space. How do you see it impacting Wealth Management now and the future of wealth management? And can it support the Advisor serving our clients, or does it replace the Advisor serving our clients?

Mike Ankers: Great question and very topical. I know we hear a lot about robo advisors and all of these platforms that are coming out and I think they do have a piece in our industry and play an important - part each of them. From our perspective, digitization makes it easier for people to do business with us. And if we were to go back down the road with a little history lesson, clients used to pay us for access to information. So you paid a brokerage commission because you needed to access the stock market through your stock broker, and what is that commission for? That commission was for 1. access, 2. the proprietary research he or she provided you, and 3. was scarcity. You had to go find somebody to sell you the stalk or buy the stock from. That sounds ridiculous to probably many people listening to this, but that's the way it was. And now fast forward, all of that stuff's free. And people have unlimited access to all of that information in real time. And that's the big value of digitization. So from a client's point of view, you now have access to everything that was once you had to pay for. Now, what you're paying for are things that you need from an Advisor, and that is the value of advice.

Sarah Widmeyer: It's really switched, hasn't it? 

Mike Ankers: Well, it has and every different aspect of our industry has changed from it. So we are still very much a paper based industry but that's changing quickly. So it was booklet upon booklet and piles of paper to get somebody to to sign up for an account. Digitization can put all that in a very easy to read format. It can be safe for you at someplace where you're not going to lose it when you take it home. And your signature can be on file and make it all very clear and easy for you. So opening an account can be less about the paperwork and again, more about the conversation with the clients.

Sarah Widmeyer: Yeah. I think it's really not a question of digital OR advice - it's AND. And I think going forward in the industry, it's going to be how firms combine digital engines and digital tools, ease and quickness of information, ease of financial planning, and being able to sit down with a glass of wine on a Friday night and say, well, what if I did retire five years earlier? What if I did retire five years later? What does that do to my retirement plan? I think in my view, it's not digitization or a human, it's both.

Mike Ankers: I couldn't agree more. The digitization just makes it easier to get what you need readily on your own time. And and I'm one of those people, my personal thinking time is is at night or on the weekends, and that's when my Investment Advisor is not in the office. So, but when I do need him, he's there. And I reach out and we have a conversation. You know, it's a start of the year, we've just done TFSA contributions, and we're talking about everything going forward for this year, that stuff I need to talk to him about. I don't need to ask them what my balance is because I can just look that up online. It's very, very easy, but they do really work together and for those that are looking for a fullsome relationship should expect excellence of both. 

Sarah Widmeyer: Right, okay. So, if there are individuals listening to us today who don't feel as though they're receiving the full value of wealth advice, so they've listened to us and they're going, oh gosh, you know, I'm not getting any of this or I'm getting some of this, I need more of this. What are some of the steps that they can take for themselves? Let's give them some actionable steps.

Mike Ankers: Breaking up is never hard or never easy to do, sorry.

Sarah Widmeyer: I think that's a song.

Mike Ankers: It is. It's in my head when you say that. So the truth is, is that I would always recommend that people open up the lines of communication. I firmly believe that everybody has best interests in mind. So I would sit down and have a conversation with my Advisor about why it's working or why it's not working and see if something can change. If you're already past the point where there's a lack of trust, then look for another Advisor. Ask your friends if you're comfortable doing so, do you know somebody because word of mouth is really where we get most of our referrals from. If you have a center of influence, such as an accountant or a lawyer, they will typically have professional dealings with Investment Advisors. And then ask around. You might want to find some websites or might be a firm that you're curious about. But go and search and find somebody in your area. When you first meet with them be very, again, be very clear about your expectations. It's okay to walk away from that meeting if you're not comfortable and politely tell the person I don't, I'm going to try something different. It's difficult, which is why people stay with bad Advisors from years and years and years. And it's terrible. I get frustrated to see it. It's the same with real estate agents, you know, any any professional services people stay with, because they don't know how to have that conversation. I believe in professional courtesy, if something's not working, say so. And the best course for you is to try to fix what's not working. And if that doesn't work, seek an alternative. And there's lots out there.

Sarah Widmeyer: Yeah. And it's not just about the price, right? It's not just about the fee. I mean, if it was just about the price and all about the fee, we wouldn't be drinking Starbucks and we wouldn't be paying up for this or that it's not about the fee. It's about what you're getting for the fee. You need to make sure there's value for the fee. But I think that's one of the biggest disservices that you know, some of the advertising that is playing now does to our industry is that it's not just about the fee. It's about what you're getting for the fee. And if that value is right for you.

Mike Ankers: That's right. It Again, what do you what are you looking for? If you're just looking for pure investment management, and you never want to talk to anybody or think about it again, don't pay an Investment Advisor. Save the money, buy yourself something nice. If you do want more of a relationship, then that will come at a cost. Anything that you get for free, you got a question why it's free? And, interestingly, we had a client come to me years ago, and he asked for a frank conversation and he said, my current investment dealer has all of a sudden has offered me this free plan. And he said, I don't believe in free. I'm a business owner, I don't give away anything for free so I have to believe there's something in it for them. And he was right. There is something in it for them. And I know exactly what they were looking for. But he ended up planning through us because he just wanted to plan that was about him. And he was happy to pay. Yeah. So his Advisor worked with him to get a plan in place. He had multiple businesses, so there was generational issues, there was cross border issues. And our team put it all together for him and said, here it is, and this is what you're paying your fee for. He knew exactly what it cost, what he gets for it. And we've got a great relationship with that client to this day. It was unbiased. It wasn't free, and it was all about him.

Sarah Widmeyer: Yeah, exactly. Any closing thoughts before we wrap up today.

Mike Ankers: I'm very passionate about this business. I think that more people deserve to have great Advisors and we're always trying to raise our standards at our firm at all times. And I would just say to clients, if you're not comfortable, it means you're not going to be comfortable for a very long time. Get your peace of mind. I go back to my mother. She's never worried about money ever since that one day where she first got an Advisor. And she still has one to this day. And she greatly values that relationship. Because twice a year, all she cares about is am I doing okay? She gets a yes you are, and here's why. And she'll probably cut her Advisor off at that point and she goes away and smiles for another six months. And that's the kind of relationship she wants. The money second to just that peace of mind that things are being looked after. And I think a lot of people are like that. They just want that that relationship to say that everything's okay. If you're not getting that you're doing yourself a disservice and your family a disservice. And a good Advisor can help you have those difficult conversations with your old Advisor if you do want to move.

Sarah Widmeyer: Yeah, exactly. It's about a partnership. 

Mike Ankers: It's a partnership. 

Sarah Widmeyer: It's a partnership, defined on your terms.

Mike Ankers: On your terms, and it's dependent on communication and mutual respect for each other's positions and what you need from each other. It's, it can be a very powerful thing. When we attend client events it's more like a, well they're happier than family gatherings depending on your family but you you meet these clients with great stories about how they've been helped over the years by their Advisor and it goes beyond a professional relationship. They're friendships and it's a family relationship after many, many years.

Sarah Widmeyer: That's awesome. At our firm, we see wealth advice as a partnership between clients and Advisors. We make sure you're comfortable in your situation, because ultimately, we're here to help you live the life that you want to live. If you would like to learn more, please visit our website for articles and videos or speak to an Advisor. Remember to follow us on LinkedIn for information on wealth strategies. 
Conversations on Wealth is available wherever you get your podcasts. Thank you all for listening. I so enjoyed having you here today, Mike, and I look forward to our next conversation.

Mike Ankers: Thanks very much. 

The opinions expressed are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth Limited or its affiliates. Past performance may not be repeated. Richardson Wealth Limited is a member of Canadian Investor Protection Fund. Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.